Section 80C - Deduction in respect of life insurance premia, deferred annuity, contributions to provident fund, subscription to certain equity shares or debentures, etc. - Income-tax Act, 1961

B.-Deductions in respect of certain payments 1 [Deduction in respect of life insurance premia, deferred annuity, contributions to provident fund, subscription to certain equity shares or debentures, etc. 80C. (1) In computing the total income of an assessee, being an individual or a Hindu undivided family, there shall be deducted, in accordance with and subject to the provisions of this section, the whole of the amount paid or deposited in the previous year, being the aggregate of the sums referred to in sub-section (2), as does not exceed 12 [ one hundred and fifty thousand rupees ] . (2) The sums referred to in sub-section (1) shall be any sums paid or deposited in the previous year by the assessee- (i) to effect or to keep in force an insurance on the life of persons specified in sub-section (4); (ii) to effect or to keep in force a contract for a deferred annuity, not being an annuity plan referred to in clause (xii), on the 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 Central Government or any such deposit scheme as that Government may, by notification in the Official Gazette, specify in this behalf; (ix) as subscription to any such savings certificate as defined in clause (c) of section 2 of the Government Savings Certificates Act, 1959 (46 of 1959), as the Central Government may, by notification in the Official Gazette, specify in this behalf; (x) as a contribution, in the name of any person specified in sub-section (4), for participation in the Unit-linked Insurance Plan, 1971 (hereafter in this section referred to as the Unit-linked Insurance Plan) specified in Schedule II of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002); (xi) as a contribution in the name of any person specified in sub-section (4) for participation in any such unit-linked insurance plan of the LIC Mutual Fund 2 [ referred to in ] clause (23D) of section 10, as the Central Government may, by notification in the Official Gazette, specify in this behalf; (xii) to effect or to keep in force a contract for such annuity plan of the Life Insurance Corporation or any other insurer as the Central Government may, by notification in the Official Gazette, specify; (xiii) as subscription to any units of any Mutual Fund 3 [ referred to in ] clause (23D) of section 10 or from the Administrator or the specified company under any plan formulated in accordance with such scheme as the Central Government may, by notification in the Official Gazette, specify in this behalf; (xiv) as a contribution by an individual to any pension fund set up by any Mutual Fund 4 [ referred to in ] clause (23D) of section 10 or by the Administrator or the specified company, as the Central Government may, by notification in the Official Gazette, specify in this behalf; (xv) as subscription to any such deposit scheme of, or as a contribution to any such pension fund set up by, the National Housing Bank established under section 3 of the National Housing Bank Act, 1987 (53 of 1987) (hereafter in this section referred to as the National Housing Bank), as the Central Government may, by notification in the Official Gazette, specify in this behalf; (xvi) as subscription to any such deposit scheme of- (a) a public sector company which is engaged in providing long-term finance for construction or purchase of houses in India for residential purposes; or (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, housing board or other authority engaged in the construction and sale of house property on ownership basis; or (b) any instalment or part payment of the amount due to any company or co-operative society of which the assessee is a shareholder or member towards the cost of the house property allotted to him; or (c) repayment of the amount borrowed by the assessee from- (1) the Central Government or any State Government, or (2) any bank, including a co-operative bank, or (3) the Life Insurance Corporation, or (4) the National Housing Bank, or (5) any public company formed and registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes which is eligible for deduction under clause (viii) of sub-section (1) of section 36, or (6) any company in which the public are substantially interested or any co-operative society, where such company or co-operative society is engaged in the business of financing the construction of houses, or (7) the assessee s employer where such employer is an authority or a board or a corporation or any other body established or constituted under a Central or State Act, or (8) the assessee s employer where such employer is a public company or a public sector company or a university established by law or a college affiliated to such university or a local authority or a co-operative society; or (d) stamp duty, registration fee and other expenses for the purpose of transfer of such house property to the assessee, but shall not include any payment towards or by way of- (A) the admission fee, cost of share and initial deposit which a shareholder of a company or a member of a co-operative society has to pay for becoming such shareholder or member; or (B) 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 (C) any expenditure in respect of which deduction is allowable under the provisions of section 24; (xix) as subscription to equity shares or debentures forming part of any eligible issue of capital approved by the Board on an application made by a public company or as subscrip tion 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 finan cial institution and the entire proceeds of the issue are uti lised 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 re ferred 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 subscrip tion to such units is subscribed only in the eligible issue of capital of any company. Explanation .-For the purposes of this clause eligible issue of capital means an issue referred to in clause (i) of the Explanation to clause (xix) of sub-section (2); 5 [ (xxi) as term deposit- (a) for a fixed period of not less than five years with a scheduled bank; and (b) which is in accordance with a scheme framed and notified, by the Central Government, in the Official Gazette for the purposes of this clause. Explanation .-For the purposes of this clause, scheduled bank means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), or a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), or a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980), or any other bank, being a bank included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934); ] 6 [ (xxii) as subscription to such bonds issued by the National Bank for Agriculture and Rural Development, as the Central Government may, by notification in the Official Gazette, specify in this behalf; ] 7 [ (xxiii) in an account under the Senior Citizens Savings Scheme Rules, 2004; ] 7 [ (xxiv) as five year time deposit in an account under the Post Office Time Deposit Rules, 1981; ] 15 [ (xxv) being an employee of the Central Government, as a contribution to a specified account of the pension scheme referred to in section 80CCD (a) for a fixed period of not less than three years; and (b) which is in accordance with the scheme as may be notified by the Central Government in the Official Gazette for the purposes of this clause. Explanation .-For the purposes of this clause, specified account means an additional account referred to in sub-section (3) of section 20 of the Pension Fund Regulatory and Development Authority Act, 2013 (23 of 2013). ] (3) The provisions of sub-section (2) shall apply only to so much of any premium or other payment made on an 9 [ insurance policy, other than a contract for a deferred annuity, issued on or before the 31st day of March, 2012 ] as is not in excess of twenty per cent of the actual capital sum assured. Explanation .-In calculating any such actual capital sum assured, 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. 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 any time during the term of the policy, not taking into account- (i) the value of any premium agreed to be returned; or (ii) 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 persons referred to in sub-section (2) shall be the following, namely:- (a) for the purposes of clauses (i), (v), (x) and (xi) of that sub-section,- (i) in the case of an individual, the individual, the wife or husband and any child of such individual, and (ii) in the case of a Hindu undivided family, any member thereof; (b) for the purposes of clause (ii) of that sub-section, in the case of an individual, the individual, the wife or husband and any child of such individual; 14 [ (ba) for the purposes of clause (viii) of that sub-section, in the case of an individual, the individual or any girl child of that individual, or any girl child for whom such person is the legal guardian, if the scheme so specifies; ] (c) for the purposes of clause (xvii) of that sub-section, in the case of an individual, any two children of such individual. (5) Where, in any previous year, an assessee- (i) terminates his contract of insurance referred to in clause (i) of sub-section (2), by notice to that effect or where the contract ceases to be in force by reason of failure to pay any premium, by not reviving contract of insurance,- (a) in case of any single premium policy, within two years after the date of commencement of insurance; or (b) in any other case, before premiums have been paid for two years; or (ii) terminates his participation in any unit-linked insurance plan referred to in clause (x) or clause (xi) of sub-section (2), by notice to that effect or where he ceases to participate by reason of failure to pay any contribution, by not reviving his participation, before contributions in respect of such participa tion have been paid for five years; or (iii) transfers the house property referred to in clause (xviii) of sub-section (2) before the expiry of five years from the end of the financial year in which possession of such proper ty is obtained by him, or receives back, whether by way of refund or otherwise, any sum specified in that clause, then,- (a) no deduction shall be allowed to the assessee under sub-section (1) with reference to any of the sums, 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 assess ment 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 the register of members or of debenture-holders, as the case may be, of the public compa ny. 8 [ (6A) If any amount, including interest accrued thereon, is withdrawn by the assessee from his account referred to in clause (xxiii) or clause (xxiv) of sub-section (2), before the expiry of the period of five years from the date of its deposit, the amount so withdrawn shall be deemed to be the income of the assessee of the previous year in which the amount is withdrawn and shall be liable to tax in the assessment year relevant to such previous year: Provided that the amount liable to tax shall not include the following amounts, namely:- (i) any amount of interest, relating to deposits referred to in clause (xxiii) or clause (xxiv) of sub-section (2), which has been included in the total income of the assessee of the previous year or years preceding such previous year; and (ii) any amount received by the nominee or legal heir of the assessee, on the death of such assessee, other than interest, if any, accrued thereon, which was not included in the total income of the assessee for the previous year or years preceding such previous year. ] (7) 16 [ **** ] (8) In this section,- (i) Administrator means the Administrator as referred to in clause (a) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002); (ii) contribution to any fund shall not include any sums in repayment of loan; (iii) insurance shall include- (a) a policy of insurance on the life of an individual or the spouse or the child of such individual or a member of a Hindu undivided family securing the payment of specified sum on the stipulated date of maturity, 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 there on) in the event of such person dying before the said stipulated date; (b) a policy of insurance effected by an individual or a member of a Hindu undivided family for the benefit of a minor with the object of enabling the minor, after he has attained majority to secure 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; (iv) Life Insurance Corporation means the Life Insurance Corporation of India established under the Life 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, contribu tions 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 provi sions 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 does not exceed Rs.6,000 the whole of such aggregate; (b) where such aggregate exceeds Rs. 6,000 but does not exceed Rs. 12,000 Rs. 6,000 plus 50 per cent of the amount by which such aggregate exceeds Rs. 6,000; (c) where such aggregate exceeds Rs. 12,000 Rs. 9,000 plus 40 per cent of the amount by which such aggregate exceeds Rs. 12,000. (2) The sums referred to in sub-section (1) shall be the follow ing, 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; or (ii) to effect or to keep in force a contract for a deferred annuity, not being an annuity plan referred to in clause (ii) of sub-section (1) of section 80CCA, on the life of the assessee or on the life of the wife or husband or any child of the assessee: 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; or (iii) as a contribution to any provident fund to which the Provident Funds Act, 1925 (19 of 1925), applies; or (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; or (v) as a contribution for participation in the Unit-linked Insurance Plan, 1971 made under section 19(1)(cc) of the Unit Trust of India Act, 1963 (52 of 1963); or (vi) as a contribution for participation in any such unit-linked insurance plan of the LIC Mutual Fund notified under clause (23D) of the section 10, as the Central Government may, by notification in the Official Gazette, specify in this behalf; (b) where the assessee is a Hindu undivided family, (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 the family; or (2) as a contribution to any provident fund referred to in sub-clause (iv) of clause (a), where such contribution is to an account standing in the name of the any member of the family ; or (ii) any sums deposited in the previous year by the assessee out of its income chargeable to tax in a ten-year account or a fifteen-year account under the Post Office Savings Bank (Cumula tive 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 secur ing 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 there on) 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 individu al 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 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 ap proved 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 deposit ed, in the previous year by the assessee out of his income chargeable to tax, in a ten-year account or a fifteen-year ac count under the Post Office Savings Bank (Cumulative Time Depos its) Rules, 1959, as amended from time to time. (g) where the assessee is an association of persons or a body of individuals consisting, in either case, other 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 (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 member of such association or body; (2) to effect or to keep in force a contract for a deferred annuity on life of the any member of such associa tion or body or any child of any of the members of such associa tion or body: 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; or (3) as a contribution to any provident fund referred to in sub-clause (iv) of clause (a); or (4) as a contribution for participation by any one member of such association or body in the Unit-linked Insurance Plan; (ii) any sums deposited in the previous year by such associ ation 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; (h) where the assessee is an individual or a Hindu undivided family or where the assessee is an association of per sons 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 previ ous 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, 1959 (46 of 1959), as the Central Government may, by notification 76 in the Official Gazette, specify in this behalf; (ii) for the purposes of purchase or construction of a residential house property the construction of which is completed after the 31st day of March, 1987, and 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 resi dence, 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, housing board or other authority engaged in the construction and sale of house property on ownership basis; or (b) any instalment or part payment of the amount due to any company or co-operative society of which the assessee is a share holder or member towards the cost of the house property allotted to him; or (c) re-payment of the amount borrowed by the assessee from (1) the Central Government or any State Government, or (2) any bank, including a co-operative bank, or (3) the Life Insurance Corporation, or (3A) the National Housing Bank, or (4) any public company formed and registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes which is approved for the purposes of clause (viii) of sub-section (1) of section 36, or (5) any company in which the public are substantially interested or any co-operative society, where such company or co-operative society is engaged in the business of financing the construction of houses, or (6) the assessee s employer where such employer is a public company or a public sector company or a university established by law or a college affiliated to such university or a local authority; (d) stamp duty, registration fee and other expenses for the purpose of transfer of such house property to the assessee, but shall not include any payment towards or by way of (A) the admission fee, cost of share and initial deposit which a shareholder of a company or a member of a co-operative society has to pay for becoming such shareholder or member; or (B) the cost of the land, except where the consideration for the purchase of the house property 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 renova tion 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 allow able 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 charge able to tax as subscription to the National Savings Certificates (VI Issue) and National Savings Certificates (VII Issue) issued under the Government Savings Certificates Act, 1959 (46 of 1959). (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 an contract for a deferred annuity as is not in excess of ten per cent of the actual capital sum as sured. 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 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, actor or sportsman (including an athlete), sixty thousand rupees; (ii) in the case of any other individual or a Hindu undivided family or any such association of persons or a body of individuals as is referred to in clause (g) or clause (h) of sub-section (2), forty thousand rupees. (5) If the assessee participating in any unit-linked insur ance plan referred to in sub-clause (v) or sub-clause (vi) of clause (a) of sub-section (2), or in the case of an assessee being an association of persons or a body of individuals referred to in clause (g) of sub-section (2), the member thereof participating in any such plan, terminates his participation in that plan (by notice to that effect or where he ceases to participate by reason of failure to pay any contribution, by not reviving his participation) before contributions in respect of such participa tion have been paid for five years, then (a) no deduction shall be allowed to the assessee under this section in respect of the contribution, if any, paid in the previous year in which the participation is so terminated; and (b) the deductions allowed in respect of the contributions paid in the previous years preceding the previous year referred to in clause (a) shall be deemed to be the income of the assessee of that previous year and shall be chargeable to tax accordingly. Explanation: For the purposes of this sub-section, the deduction allowed under this section in respect of the contribution paid in any previous year shall be the amount by which the deduction allowed under this section for that year exceeds the deduction which would have been allowed for that year if no such contribu tion had been paid during that year. (6) If the assessee, being (a) an individual, has effected or kept in force an insur ance 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 respect of the premiums paid in the previous year or years preceding the previous year re ferred to in clause (i ) shall be deemed to be the income of the assessee of such previous year or years and shall be chargeable to tax accordingly. Explanation 1: For the purposes of this sub-section, the deduc tion allowed under this section in respect of the premiums paid in any previous year shall be the amount by which the deduction allowed under this section for that year exceeds the deduction which would have been allowed for that year if no such premiums had been paid during that year. Explanation 2: In a case where an assessee terminates his par ticipation in any unit-linked insurance plan referred to in sub-clause (v) or sub-clause (vi ) of clause (a) of sub-section (2) in any previous year and also terminates a contract of insurance in that year, the deduction allowed under this section in respect of the contribution or premiums paid in any previous year shall, for the purposes of the Explanation to sub-section (5) and Explanation 1, be the amount by which the deduction allowed under this section for that year exceeds the deduction which would have been allowed for that year if no such contribu tion or premiums had been paid during that year. (7) In the case of an assessee referred to in clause (h) of sub-section (2), (a) where any sums specified in sub-clause (ii ) of that clause, with reference to which the deduction under sub-section (1) has been allowed are refunded to or received back by the assessee in any previous year (hereinafter referred to as the relevant previous year), then, (i) no deduction shall be allowed to the assessee under sub-section (1) with reference to any of the sums, specified in that sub-clause, paid in the relevant previous year; and (ii) the aggregate amount of the deductions so allowed in respect of the previous year or previous years preceding the relevant previous year shall be deemed to be the income of the assessee of the relevant previous year and shall be chargeable to tax under the head Income from other sources ; (b) where the house property referred to in sub-clause (ii) of that clause is transferred by the assessee before the expiry of five years from the end of the financial year in which posses sion of such property is obtained by him, then (i) no deduction shall be allowed to the assessee 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 Corpo ration Act, 1956 (31 of 1956); (b) public company shall have the same meaning as in sec tion 3 of the Companies Act, 1956 (1 of 1956); (c) transfer shall be deemed to include also the transac tions referred to in clause (f) of section 269UA; (d) contribution to any fund shall not include any sums in repayment of loan. 2. Substituted vide Section 16 of the Finance Act, 2006 w.e.f. 01-04-2007 before it was read as, notified under 3. Substituted vide Section 16 of the Finance Act, 2006 w.e.f. 01-04-2007 before it was read as, notified under 4. Substituted vide Section 16 of the Finance Act, 2006 w.e.f. 01-04-2007 before it was read as, notified under 5. Inserted vide Section 16 of the Finance Act, 2006 w.e.f. 01-04-2007 6. Inserted vide Section 24 of the Finance Act, 2007 w.e.f. 01-04-2008 7. Inserted vide Section 16 of the Finance Act, 2008 w.e.f. 01-04-2008 8. Inserted vide Section 16 of the Finance Act, 2008 w.e.f. 01-04-2008 9. Substituted vide Section 24 of the Finance Act, 2012 w.e.f. 01-04-2013 before it was read as, insurance policy other than a contract for a deferred annuity 10. Inserted vide Section 24 of the Finance Act, 2012 w.e.f. 01-04-2013 11. Inserted vide Section 12 of the Finance Act, 2013 w.e.f. 01-04-2014 12. Substituted vide Section 27 of the Finance (No. 2) Act, 2014 w.e.f. 01-04-2015 before it was read as, one lakh rupees 13. Substituted vide Section 16 of the Finance Act, 2015 w.e.f. 01-04-2015 before it was read as, as subscription to 14. Inserted vide Section 16 of the Finance Act, 2015 w.e.f. 01-04-2015 15. Inserted vide Section 18 of the Finance (No. 2) Act, 2019 w.e.f. 01-04-2020 16. Omitted vide Section 36 of the Finance Act, 2023 w.e.f. 01-04-2023 before it was read as, (7) For the purposes of this section,- (a) the insurance, deferred annuity, provident fund and superannuation fund referred to in clauses (i) to (vii); (b) unit-linked insurance plan and annuity plan referred to in clauses (xii) to (xiiia); (c) pension fund and subscription to deposit scheme re ferred to in clauses (xiiic) to (xiva); (d) amount borrowed for purchase or construction of a residential house referred to in clause (xv), of sub-section (2) of section 88 shall be eligible for deduction under the corresponding provisions of this section and the deduc tion shall be allowed in accordance with the provisions of this section.