RULE 330 INCOME-TAX RULES 2026 Limits of reserve

Last Updated on: April 29, 2026

RULE 330 INCOME-TAX RULES 2026

Limits of reserve for unexpired risks.

330. (1) In the computation of profits and gains for any insurance business other than life insurance, the amount carried over to a reserve for unexpired risks, including any amount carried over to any such additional reserve eligible for deduction under paragraph 4(1)(d) of Schedule XIV to the Act, shall not exceed,—

(a)		where the insurance business relates to fire insurance or engineering insurance that covers terrorism risks, 100% of the net premium income of such business of the tax year; or
(b)		where the insurance business relates to fire insurance or miscellaneous insurance, other than those mentioned in clause (a), 50% of the net premium income of such business of the tax year; or
(c)		where the insurance business relates to marine insurance, 100% of the net premium income of such business of the tax year.

(2) Any amount out of the amount carried over to such reserve or additional reserve, which is not allowed as a deduction under this rule in respect of any tax year, shall not be included in the total income for the immediately succeeding tax year in the revenue account relating to which the said amount is credited.

(3) In this rule,—

(a)		“marine insurance” includes the Export Credit Insurance; and
(b)		“net premium income” refers to the premium amount received as reduced by the reinsurance premium paid during the relevant tax year.