Section 87 - Rebate to be allowed in computing income-tax - Income-tax Act, 1961

CHAPTER VIII 1 [REBATES AND RELIEFS] 2 [ A. Rebate of income-tax Rebate to be allowed in computing income-tax. 87. (1) In computing the amount of income-tax on the total income of an assessee with which he is chargeable for any assessment year, there shall be allowed from the amount of income-tax (as computed before allowing the deductions under this Chapter), in accordance with and subject to the provisions of 3 [ 7 [ sections 87A, 9 [ **** ] and 88E ], the deductions specified in those sections. (2) The aggregate amount of the deductions under 8 [ section 87A 10 [ **** ] or section 88E ] shall not, in any case, exceed the amount of income-tax (as computed before allowing the deductions under this Chapter) on the total income of the assessee with which he is chargeable for any assessment year. ] *************** NOTES:- 1. Substituted vide Section 30 of the Finance Act, 1990 w.e.f. 01-04-1991 before it was read as, RELIEF IN RESPECT OF INCOME-TAX Earlier , Substituted vide Third Schedule of the Finance (No. 2) Act, 1967 w.e.f. 01-04-1968 before it was read as, REBATES AND RELIEFS 2. Inserted vide Section 30 of the Finance Act, 1990 w.e.f. 01-04-1991 Earlier, Omitted vide Third Schedule of the Finance (No. 2) Act, 1967 w.e.f. 01-04-1968 before it was read as, Rebate on life insurance premia, annuities and contributions to provident funds, etc. 87. (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: (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 of the assessee; or (ii) to effect or to keep in force a contract for a deferred annuity on the life of the assessee or on the life of the wife or husband of the assessee; or (iii) as a contribution to any provident fund to which the Provident Funds Act, 1925 (9 of 1925) applies; (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 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; (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; (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. (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 (i) in the case of an individual being an author, playwright, artist, musician or actor, such percentage of his total income or such amount as may be prescribed: Provided that such individual has effected an insurance referred to in sub-clause (i) of clause (a) of sub-section (1) prior to the first day of March, 1964 and has paid any sum in the previous year to keep in force such insurance; (ii) in the case of any other individual (including an author, playwright, artist, musician or actor to whom the provisions of clause (i) do not apply), twenty-five per cent of the total income or ten thousand rupees whichever is less; (iii) in the case of a Hindu undivided family, twenty-five per cent of its total income or twenty thousand rupees whichever is less. (4) The amount of income-tax deductible under this section shall not in any case exceed half the aggregate of the sums in respect of which the deduction is allowed under this section. (5) This section shall not apply in respect of (i) the assessment year commencing on the 1st day of April, 1966 and any subsequent assessment year, in the case of an assessee whose total income includes any income chargeable under the head Salaries from which tax is deducted, or deductible, at source in accordance with the provisions of section 192; and (ii) the assessment year commencing on the 1st day of April, 1965 and any subsequent assessment year in the case of any other assessee. 3. Substituted vide Section 20 of the Finance (No. 2) Act, 2004 w.e.f. 01-04-2005 before it was read as, sections 88, 88A, 88B and 88C Earlier , Amended vide Section 50 of the Finance Act, 1992 w.e.f. 01-04-1993 And was Amended vide Section 45 of the Finance Act, 2000 w.e.f. 01-04-2001 4. Inserted vide Section 50 of the Finance Act, 1992 w.e.f. 01-04-1993 5. Inserted vide Section 45 of the Finance Act, 2000 w.e.f. 01-04-2001 6. Inserted vide Section 20 of the Finance (No. 2) Act, 2004 w.e.f. 01-04-2005 7. Substituted vide Section 21 of the Finance Act 2013 w.e.f. 01-04-2014 before it was read as, sections 88 8. Substituted vide Section 21 of the Finance Act 2013 w.e.f. 01-04-2014 before it was read as, section 88 9. Omitted vide Section 43 of the Finance Act 2023 w.e.f. 01-04-2023 before it was read as, 88 ] , 88A, 88B, 88C, 88D 10. Omitted vide Section 43 of the Finance Act 2023 w.e.f. 01-04-2023 before it was read as, or section 88 ] or section 88A 4 [ or section 88B ] 5 [ or section 88C ] 6 [ or section 88D