Report No. 12
Rebates and Reliefs
A-Rebate of income-tax
88. Rebate on life insurance premia, annuities and contributions to provident funds etc.-
(1) Subject to the provisions of this section, the assessee shall be entitled to a deduction, from the amount of income-tax on his total income with which he is chargeable for any assessment year, of an amount equal to the income-tax calculated at the average rate of income-tax on the following sums, namely:-
[Section 17(2), part]
(a) where the assessee is an individual any sums paid in the previous year by the assessee-
(i) to effect or to keep in force an insurance on the life of the assessee or on the life of a wife or husband of the assessee; or
(ii) to effect or to keep in force a contract for a defyrred annuity on the life of the assessee or on the life of a wife or husband of the assessed; or
(iii) as a contribution to any provident fund to which the Provident Funds Act, 1925 (19 of 1925), applies;
(b) where the assessee is a Hindu undivided family, any sums paid in the previous year by the assessee to effect or to keep in force an insurance on the life of any male member of the family or of the wife of any such member;
(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;
[Section 7(1), 1st proviso]
(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, to the extent provided in section 295 [58F];
(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, to the extent provided in section 311 [58R].
(2) The provisions of clauses (a) and (b) of sub-section (1) 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.
(3) The aggregate of the sums in respect of which a deduction of income-tax is allowed under sub-section (1), shall not exceed, in the case of an individual, one-fourth of his total income or eight thousand rupees, whichever is less, and in the case of a Hindu undivided family, one-fourth of its total income or sixteen thousand rupees, whichever is less.