Amendment of section 80C
10. In section 80C of the Income-tax Act, in sub-section (3A), before the Explanation, the following proviso shall be inserted with effect from the 1st day of April, 2014, namely:—
‘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.’.
Notes on Clauses:
Clause 10 of the Bill seeks to amend section 80C of the Incometax Act relating to deduction in respect of life insurance premia, deferred annuity, contributions to provident fund, subscription to certain equity shares or debentures, etc.
Under the existing provisions contained in sub-section (3A) of the aforesaid section, the deduction is available in respect of any premium or other payment made on an insurance policy up to ten per cent. of the “actual capital sum assured”.
It is proposed to insert a proviso in aforesaid sub-section (3A), so as to provide a higher limit of fifteen per cent. where the policy referred to in sub-section (3A) is for the 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. This proviso shall apply in respect of an insurance policy issued on or after 1st day of April, 2013.
This amendment will take effect from 1st April, 2014 and will, accordingly, apply in relation to the assessment year 2014-15 and subsequent assessment years.
