TaxTMI 
TaxTMI 
Deduction in respect of life insurance premia, deferred annuity, contributions to provident fund, subscription to certain equity shares or debentures, etc.
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.... life of persons specified in sub-section (4): Provided that such contract does not contain a provision for the exercise by the insured of an option to receive a cash payment in lieu of the payment of the annuity; (iii) by way of deduction 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 spouse or children, in so far as the sum so deducted does not exceed one-fifth of the salary; (iv) as a contribution by an individual to any provident fund to which the Provident Funds Act, 1925 (19 of 1925) applies; (v) as a contribution to any provident fund set up by the Central Government and notified by it in this behalf in the Official Gazette, where such contribution is to an account standing in the name of any person specified in sub-section (4); (vi) as a contribution by an employee to a recognised provident fund; (vii) as a contribution by an employee to an approved superannuation fund; (viii) 13[as subscription, in the name of any person specified in sub-section (4), to] any such security of the C....
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.... (b) any authority constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both, as the Central Government may, by notification in the Official Gazette, specify in this behalf; (xvii) as tuition fees (excluding any payment towards any development fees or donation or payment of similar nature), whether at the time of admission or thereafter,- (a) to any university, college, school or other educational institution situated within India; (b) for the purpose of full-time education of any of the persons specified in sub-section (4); (xviii) for the purposes of purchase or construction of a residential house property the income from which is chargeable to tax under the head "Income from house property" (or which would, if it had not been used for the assessee's own residence, have been chargeable to tax under that head), where such payments are made towards or by way of- (a) any instalment or part payment of the amount due under any self-financing or other scheme of any development authority, ho....
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....ny eligible issue of capital approved by the Board on an application made by a public company or as subscrip­tion to any eligible issue of capital by any public financial institution in the prescribed form. Explanation.-For the purposes of this clause,- (i) "eligible issue of capital" means an issue made by a public company formed and registered in India or a public finan­cial institution and the entire proceeds of the issue are uti­lised wholly and exclusively for the purposes of any business referred to in sub-section (4) of section 80-IA; (ii) "public company" shall have the meaning assigned to it in section 3 of the Companies Act, 1956 (1 of 1956); (iii) "public financial institution" shall have the meaning assigned to it in section 4A of the Companies Act, 1956 (1 of 1956); (xx) as subscription to any units of any mutual fund re­ferred to in clause (23D) of section 10 and approved by the Board on an application made by such mutual fund in the prescribed form: Provided that this clause shall apply if the amount of subscrip­tion to such units is subscribed only in the eligible issue of capital of any company. Explanation.-For the purposes of thi....
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....e 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. 10[(3A) The provisions of sub-section (2) shall apply only to so much of any premium or other payment made on an insurance policy, other than a contract for a deferred annuity, issued on or after the 1st day of April, 2012 as is not in excess of ten per cent of the actual capital sum assured. 11[Provided that where the policy, issued on or after the 1st day of April, 2013, is for insurance on life of any person, who is- (a) a person with disability or a person with severe disability as referred to in section 80U, or (b) suffering from disease or ailment as specified in the rules made under section 80DDB, the provisions of this sub-section shall have effect as if for the words "ten per cent", the words "fifteen per cent" had been substituted] Explanation.-For the purposes of this sub-section, "actual capital sum assured" in relation to a life insurance policy shall mean the minimum amount assured under the policy on happening of the insured event at an....
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...., referred to in clauses (i), (x), (xi) and (xviii) of sub-section (2), paid in such previous year; and (b) the aggregate amount of the deductions of income so allowed in respect of the previous year or years preceding such previous year, shall be deemed to be the income of the assessee of such previous year and shall be liable to tax in the assess­ment year relevant to such previous year. (6) If any equity shares or debentures, with reference to the cost of which a deduction is allowed under sub-section (1), are sold or otherwise transferred by the assessee to any person at any time within a period of three years from the date of their acquisition, the aggregate amount of the deductions of income so allowed in respect of such equity shares or debentures in the previous year or years preceding the previous year in which such sale or transfer has taken place shall be deemed to be the income of the assessee of such previous year and shall be liable to tax in the assessment year relevant to such previous year. Explanation.-A person shall be treated as having acquired any shares or debentures on the date on which his name is entered in relation to those shares or debentures in ....
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....fe Insurance Corporation Act, 1956 (31 of 1956); (v) "public company" shall have the same meaning as in section 3 of the Companies Act, 1956 (1 of 1956); (vi) "security" means a Government security as defined in clause (2) of section 2 of the Public Debt Act, 1944 (18 of 1944); (vii) "specified company" means a company as referred to in clause (h) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002); (viii) "transfer" shall be deemed to include also the transactions referred to in clause (f) of section 269UA.] ************** NOTES:- 1. Inserted vide Section 21 of the Finance Act, 2005 w.e.f. 01-04-2006 Earlier, Omitted vide Section 50 of the Finance Act, 1990 w.e.f. 01-04-1991 before it was read as, "Deduction in respect of life insurance premia, contribu­tions to provident fund, etc. 80C. (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 calculated, with reference to the aggregate of the sums specified in sub-section (2), at the following rates, namely:- (a) where such aggregate doe....
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....ost Office Savings Bank (Cumula­tive Time Deposits) Rules, 1959, as amended from time to time, where such sums are deposited in an account standing in the name of any member of the family. Explanation : For the purposes of sub-clause (i) of clause (a) and sub-clause (i) of 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....
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.... 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; (h) where the assessee is an individual or a Hindu undivided family or where the assessee is an association of per­sons or a body of individuals consisting, in either case, only of husband and wife governed by the system of community of property in force in the State Goa and the Union Territories of Dadra and Nagar Haveli and Daman and Diu, any sums paid in the previ­ous year by such assessee out of his or its income chargeable to tax,- (i) as subscription to any such security of the Central Government as that Government may, by notification 76 in the Official Gazette, specify in this behalf; or (ia) as subscription to any such deposit scheme of the National Housing Bank establishment under section 3 of the National Housing Bank Act, 1987 (53 of 1987), as the Central Government may, by notification 78 in the Official Gazette, specify in this behalf; (ib) as subscription to any such savings certificate as defined in clause (c) of section 2 of the Government Savings Certificates Act, 195....
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....is a composite amount and the cost of the land alone cannot be separately ascertained; or (C) the cost of any addition or alteration to, or renova­tion or repair of, the house property which is carried out after the issue of the completion certificate in respect of the house property by the authority competent to issue such certificate or after the house property or any part thereof has either been occupied by the assessee or any other person on his behalf or been let out; or (D) any expenditure in respect of which deduction is allow­able under the provisions of section 24; (i) where the assessee is an individual or a Hindu undivided family or where the assessee is an association of persons or a body of individuals consisting, in either case, only of husband and, wife governed by the system of community of property in force in the State of Goa and the Union territories of Dadra and Nagar Haveli and Daman and Diu, any sums paid in the previous year by such assessee out of his or its income charge­able to tax as subscription to the National Savings Certificates (VI Issue) and National Savings Certificates (VII Issue) issued under the Government Savings Certificates ....
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....tion for that year exceeds the deduction which would have been allowed for that year if no such contribu­tion had been paid during that year. (6) If the assessee, being- (a) an individual, has effected or kept 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; or (b) a Hindu undivided family, has effected or kept in force an insurance on the life of any member of the family; or (c) an association of persons or a body of individuals referred to in clause (g) of sub-section (2), has effected or kept 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, terminates the contract of insurance (by notice to that effect or where the contract ceases to be in force by reason of failure to pay any premiums, by not reviving the contract of insurance) before premiums have been paid for two years, then- (i) no deduction shall be allowed to the assessee under this section in respect of the premiums, if any, paid in the previous year in which the policy is so terminated; and (ii) the deduction allowed in respe....
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....sessee under sub-section (1) with reference to any of the sums, specified in that sub-clause, paid in the previous year in which the transfer is so made; and (ii) the aggregate amount of the deductions allowed under sub-section (1) with reference to the sums specified in that sub-clause in respect of the previous year or previous years preceding the previous year referred to in sub-clause (i) of this clause shall be deemed to be the income of the assessee of the previous year in which the transfer is made and shall be chargeable to tax under the head "Income from other sources"; (c) where the aggregate of any sums specified in sub-clause (ii) of that clause exceeds an amount of ten thousand rupees, a deduction under sub-section (1) shall be allowed with reference to so much of the aggregate as does not exceed an amount of ten thousand rupees. (8) In this section,- (a) "Life Insurance Corporation" means the Life Insurance Corporation of India established under the Life Insurance Corpo­ration Act, 1956 (31 of 1956); (b) "public company" shall have the same meaning as in sec­tion 3 of the Companies Act, 1956 (1 of 1956); (c) "transfer" shall be deemed to include al....