Section 80C

Deductions - Life insurance premia, contribution to provident fund, etc.

Notification under section 80C(2)(v) - Deduction in respect of contributions to provident fund - In exercise of the powers conferred by clause (v) of sub-section (2) of section 80C of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies the Public Provident Fund, established under the Public Provident Fund Scheme, 1968, for the purposes of the said clause for the assessment year 2006-07 and subsequent assessment years - Notification No. S.O. 1559(E), dated 3-11-2005.

Notification under section 80C(2)(ix) - Deduction in respect of Savings Certificate - In exercise of the powers conferred by clause (ix) of sub-section (2) of section 80C of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies the National Savings Certificates (VIII Issue) issued under the Government Savings Certificates Act, 1959 (46 of 1959) as savings certificates for the purposes of the said clause for the assessment year 2006-07 and subsequent assessment years - Notification No. S.O. 1560(E), dated 3-11-2005.

Notification under section 80C(2)(xi) - Deduction in respect of unit linked insurance plan of the LIC Mutual Fund - In exercise of the powers conferred by clause (xi) of sub-section (2) of section 80C of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies the Unit Linked Insurance Plan (formerly known as Dhanraksha 1989) of the Life Insurance Corporation Mutual Fund for the purposes of the said clause for the assessment year 2006-07 and subsequent assessment years - Notification No. S.O. 1561(E), dated 3-11-2005.

Notification under section 80C(2)(xii) - Deduction in respect of annuity plan of the LIC - In exercise of the powers conferred by clause (xii) of sub-section (2) of section 80C of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies the New Jeevan Dhara, New Jeevan Dhara-I and New Jeevan Akshay, New Jeevan Akshay-I and New Jeevan Akshay-II Plans of the Life Insurance Corporation of India, as filed by that Corporation with the Insurance Regulatory and Development Authority, as the annuity plan of the Life Insurance Corporation of India for the purposes of the said clause for the assessment year 2006-07 and subsequent assessment years - Notification No. S.O. 1562(E), dated 3-11-2005.

In exercise of the powers conferred by clause (xii) of sub-section (2) of section 80C of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies the Jeevan Akshay-III Plan of the Life Insurance Corporation of India, as filed by that Corporation with the Inusrance Regulatory and Development Authority, as the annuity plan of the Life Insurance Corporation of India for the purposes of the said clause for the assessment year 2006-07 and subsequent assessment years - Notification : No. SO 847(E), dated 1-6-2006.

Notified Scheme under section 80C(2)(xiii) - Equity Linked Savings Scheme, 2005 - Notification No. SO 1563(E), dated 3-11-2005.

Clarification on Equity Linked Savings Scheme - Investments in Equity Linked Savings Scheme, 1992 (ELSS), as amended in 1998, are eligible for tax rebate under section 88 of the Income-tax Act, 1961, if such investments are made on or before 31-3-2005.

Section 88 has been replaced by section 80C vide Finance Act, 2005. Accordingly, the Equity Linked Savings Scheme, 2005 has been notified vide S.O. No. 1563(E) dated 3-11-2005 and subsequently amended vide notification No. 259/2005 dated 13th December, 2005.

In view of this, it is clarified that tax benefit under section 80C of the Income-tax Act will be available to the investments made on or after 1-4-2005 in the units of a mutual fund or the Unit Trust if such units are issued under any plan formulated in accordance with the three schemes viz., ELSS, 1992; ELSS, 1992 as modified in 1998 and ELSS, 2005 - Press release, dated 13-12-2005.

Notification under section 80C(2)(xiv) - Deduction in respect of subscription to Pension Fund set up by any Mutual Fund - In exercise of the powers conferred by clause (xiv) of sub-section (2) of section 80C of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies the UTI Retirement Benefit Pension Fund set up by the specified company referred to in clause (h) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002) as a pension fund for the purposes of the said clause for the assessment year 2006-07 and subsequent assessment years - Notification No. S.O. 1564(E), dated 3-11-2005.

Notification under section 80C(2)(xv) - In exercise of the powers conferred by clause (xv) of sub-section (2) of section 80C of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies the National Housing Bank (Tax Saving) Term Deposit Scheme, 2008 for the purposes of the said clause.

2. The notification shall come into effect on the date of its publication in the Official Gazette. - Notification No. SO 21(E), dated 5-1-2009.

Notified deposit scheme under section 80C(2)(xvi)(a) - In exercise of the powers conferred by sub-clause (a) of clause (xvi) of sub-section (2) of section 80C the Central Government hereby specifies the Public Deposit Scheme of Housing and Urban Development Corporation Ltd. (HUDCO Bhavan, India Habitat Centre, Lodi Road, New Delhi) for an amount of rupees one thousand crore for the purposes of the said sub-clause.

2. The notification shall come into effect on the date of its publication in the Official Gazette—Notification : No. SO 37(E), dated 11-1-2007.

Scheme notified under section 80C(2)(xxi) - Bank Term Deposit Scheme, 2006—SO 1220(E), dated 28-7-2006.

Notified bond of NABARD u/s 80C(2)(xxii) - In exercise of the powers conferred by clause (xxii) of sub-section (2) of section 80C, the Central Government hereby specifies the NABARD Rural Bonds of National Bank for Agriculture and Rural Development (NABARD) for an amount of rupees five thousand crore for the purposes of the said clause.

2. This notification shall come into force with effect from the 1st day of April, 2008 - Notification No. SO 2227(E), dated 31-12-2007.

(old) Section 80C*

Deductions - Life Insurance premia, contributions to provident fund, etc.

Return of premia receipts to assessee - Wherever assessees apply for return of life insurance premium receipts the same could be returned to them after recording a note (under the ITO’s signature with date) against the column provided for in the return claiming life insurance premium rebate, to the effect that ‘the claim has been verified with reference to the original receipts which have been returned to the assessee’—Circular : No. 321 [F. No. 246/2/78-IT(A-II)], dated 15-1-1982.

Contributions to certain schemes which are eligible

- The contributions to the Maharashtra State Government Employees’ Group Insurance Scheme will be eligible for relief under section 80C, subject to the qualifying amounts prescribed in section 80C(4) - Circular : No. 337 [F. No. 178/51/82-IT(A-I)], dated 4-5-1982.

- The contributions to the Central Government Employees’ Insurance Scheme will be eligible for relief under section 80C, subject to the qualifying amounts prescribed in section 80C(4) - Circular : No. 233 [F. No. 178/33/77-IT(A-I)], dated 5-12-1977.

- The amount contributed by the employees of the Special Frontier Force to the Special Frontier Force Group Insurance Scheme will be treated as an insurance premium and will qualify for relief subject to the condition imposed in section 80C(4) - Circular : No. 404 [F. No. 178/50/82-IT(A-I)], dated 15-1-1985.

- Contributions to the Karnataka State Government Employees’ Group Insurance Scheme, 1981 will be eligible for relief under section 80C subject to the limit as prescribed in section 80C(4) - Circular: No. 518, dated 9-8-1988.

- NSC (VIII Issue) has been notified for purposes of section 80C(2)(h)(ib) - Notification : No. SO 270(E), dated 29-3-1990.

- Home Loan Account Scheme of National Housing Bank has been notified for purposes of section 80C(2)(h)(ia)—Notification : No. 850(E), dated 25-10-1989.

- Dhanraksha 1989 Plan of LIC Mutual Fund has been notified for purposes of section 80C(2)(a)(vi)—Notification : No. GSR 55(E), dated 6-2-1990.

Premiums on pure endowment assurance policy - A pure endowment assurance policy is an assurance on the life of the assessee and hence the premium paid on such policy would be eligible to rebate under section 80C.—Letter : F. No. 14/18/61-IT(A-I), dated 14-8-1962.

Contributions to family pension fund under E.P.F. Act - The provision contained in section 80C(2)(a)(ii) is wide enough to include the contributions made towards the family pension fund established by a scheme under the Employees’ Provident Fund and Family Pension Fund Act, 1952, for determining the aggregate of sums qualifying for deduction under section 80C(1).—Circular : No. 194 [F. No. 167/37/71-IT(A-I)], dated 20-3-1976.

Person to whom deduction is admissible - The deduction under section 80C can be claimed by the person who has contributed the monies out of his income chargeable to tax. It can be claimed by the first-named person in a joint holding if the first-named person has so contributed the amount.

The deduction under section 80C is to be given to the person who has purchased the NSCs out of his income chargeable to tax.

The interest accruing on the subscription to the NSCs will be included in the hands of the person who has subscribed from his income chargeable to tax.

The amount of interest re-invested will satisfy the test of having been paid out of income chargeable to tax to get the NSC and so will be entitled to deduction under section 80C.

Where subscription to the NSCs in the name of any member of the HUF, is shown by the family to have been made out of its income chargeable to tax and the beneficial ownership in such certificates vests in the family, the family would be entitled to a deduction under section 80C with reference to such contribution.

The interest accrued would be included in the hands of the persons who purchased the NSC out of their income chargeable to tax.—Circular : No. 405 [F. No. 178/1/84-IT(A-I)], dated 15-1-1985 as corrected by Circular : No. 418 [F. No. 178/1/84-IT(A-I)], dated 2-5-1985.

Premium paid on policies in name of adult children - Relief under section 80C is available in respect of premia paid on the life insurance policies on the lives of adult children, irrespective of their status; for example, premia paid on a policy on the life of a married daughter. This relief will continue to be available under the new section (section 88) introduced by the Finance Act, 1990, as the language of the new section is in pari materia with that of section 80C of the Act—Circular : No. 574, dated 22-8-1990.