Section 80C

B—Deductions in respect of certain payments

Deduction in respect of life insurance premia, contributions to provident fund, etc.

¹80C. (1) In computing the total income of an assessee there shall be deducted, in accordance with and subject to the provisions of this section, an amount equal to sixty per cent of the first five thousand rupees of the aggregate of the sums specified in sub-section (2) and fifty per cent, of the balance, if any, of such aggregate.

(2) The sums referred to in sub-section (1) shall be the following, namely :—

(a) where the assessee is an individual, any sums paid in the previous year by the assessee out of his income chargeable

to tax—

(i) to effect or to keep in force an insurance on the life of the assessee or on the life of the wife or husband or any child of the assessee;

(ii) to effect or to keep in force a contract for a deferred annuity on the life of the wife or husband or any child of the assessee, notwithstanding that such contract contains a provision for the exercise by the insured of an option to receive a cash payment in lieu of the payment of the annuity; or

(iii) as a contribution to any provident fund to which the Provident Funds Act, 1925 applies;

(iv) as a contribution to any provident fund set up by the Central Government and notified by it in this behalf in the official Gazette.

(b) where the assessee is a Hindu undivided family, any sums paid in the previous year by the assessee out of its income chargeable to tax, to effect or to keep in force an insurance on the life of any member of the family.

Explanation.—For the purposes of sub-clause (i) of clause (a) and clause (b) of this sub-section, an insurance on the life of any person referred to therein shall include

(i) a policy of insurance on the life of such person securing the payment of a specified sum on the stipulated date of maturity of the policy, if such person is alive on such date, notwithstanding that the policy of insurance provides only for the return of premiums paid (with or without any interest thereon) in the event of such person dying before the said stipulated date;

(ii) a policy of insurance effected by a person for the benefit of a minor with the object of enabling the minor, after he has attained majority, to secure an insurance on his own life by adopting the policy and on his being alive on a date (after such adoption) specified in the policy in this behalf;

(c) any sum deducted in the previous year from the salary payable by or on behalf of the Government to any individual being a sum deducted in accordance with the conditions of his service, for the purpose of securing to him a deferred annuity or making provision for his wife or children, in so far as the sum so deducted does not exceed one-fifth of the salary;

(d) if the assessee is an employee participating in a recognised provident fund, his own contributions to his individual account in the fund in the previous year, in so far as the aggregate of such contributions does not exceed one-fifth of his salary in that previous year or eight thousand rupees, whichever is less.

Explanation.—In clause (d) of this sub-section, "salary"' shall have the meaning assigned to it in clause (h) of rule 2 of Part A of the Fourth Schedule;

(e) if the assessee is an employee participating in an approved superannuation fund, any sum paid in the previous year by him by way of contribution towards the superannuation fund;

(f) where the assessee is an individual, any sums deposited, in the previous year by the assessee out of his income chargeable to tax, in a ten-year account or a fifteen-year account under the Post Office Savings Bank (Cumulative Time Deposits) Rules, 1959, as amended from time to time.

(g) where the assessee is an association of persons or a body of individuals consisting only of husband and wife governed by the system of community of property in force in the Union Territories of Dadra and Nagar Haveli and Goa, Daman and Diu

(i) any sums paid in the previous year by the assessee out of its income chargeable to tax

(1) to effect or to keep in force an insurance on the life of any member of such association or body or on the life of any child of any of the members of such association or body; or

(2) to effect or to keep in force a contract for a deferred annuity on the life of any member of such association or body or any child of any of the members of such association or body, notwithstanding that such contract contains a provision for the exercise by the insured of an option to receive a cash payment in lieu of the payment of the annuity; or

(3) as a contribution to any provident fund referred to in sub-clause (iv) of clause (a);

(ii) any sums deposited in the previous year by such association or body out of its income chargeable to tax in a 10-year account or a 15-year account under the Post Office Savings Bank (Cumulative Time Deposits) Rules, 1959, as amended from time to time.

(3) The provisions of clauses (a), (b) and (g) of sub-section (2), shall apply only to so much of any premium or other payment made on a policy other than a contract for a deferred annuity as is not in excess of ten per cent of the actual capital sum assured.

Explanation.—In calculating any such capital sum, no account shall be taken—

(i) of the value of any premiums agreed to be returned, or

(ii) of any benefit by way of bonus or otherwise over and above the sum actually assured, which is to be or may be received under the policy by any person.

(4) The aggregate of the sums referred to in sub-section (2), which qualifies for the purposes of computing the deduction under sub-section (1), shall not exceed

(i) in the case of an individual being an author, playwright artist, musician or actor, such percentage of his gross total income, or such amount, as may be prescribed;

(ii) in the case of any other individual thirty per cent of his gross total income, or †[fifteen thousand rupees], whichever is less;

(iii) in the case of a Hindu undivided family, thirty per cent of its gross total income, or thirty thousand rupees, whichever is less.

(iv) in the case of an association of persons or a body of individuals referred to in clause (g) of sub-section (2), thirty per cent of the gross total income of such association or body, or †[fifteen thousand rupees] whichever is less

 

 

[As amended by Finance (No. 2) Act, 1971 and Taxation Laws (Amendment) Act, 1970]