CHAPTER VIII

CHAPTER VIII

1[J1] [REBATES AND RELIEFS]

2[J2] [A.—Rebate of income-tax

87. Rebate to be allowed in computing income tax:-

(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 sections 3[J3] [88, 88A 4[J4] [, 88B, 88C, 88D and 88E]], the deductions specified in those sections.

(2) The aggregate amount of the deductions under section 88 or section 88A 5[J5] [or section 88B] 6[J6] [or section 88C] 7[J7] [or section 88D 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.

[87A. Rebate on educational expenses in certain cases:-

Omitted by the Finance (No. 2) Act, 1967, with effect from 1-4-1968. It was inserted by the Finance Act, 1964, with effect from 1-4-1964.]

1[J8] 88. Rebate on life insurance premia, contribution to provident fund, etc:-

2[J9] [(1) Subject to the provisions of this section, an assessee, being an individual, or a Hindu undivided family, shall be entitled to a deduction, from the amount of income-tax (as computed before allowing the deductions under this Chapter) on his total income with which he is chargeable for any assessment year, of an amount equal to—

(i) in the case of an individual or a Hindu undivided family, whose gross total income before giving effect to deductions under Chapter VIA, is one lakh fifty thousand rupees or less, twenty per cent of the aggregate of the sums referred to in sub-section (2):

Provided that an individual shall be entitled to a deduction of an amount equal to thirty per cent of the aggregate of the sums referred to in sub-section (2) if his income under the head "Salaries"—

(a) Does not exceed one lakh rupees during the previous year before allowing the deduction under section 16; and

(b) Is not less than ninety per cent of his gross total income, as defined in sub-section (5) of section 80B;

(ii) in the case of an individual or a Hindu undivided family, whose gross total income before giving effect to deductions under Chapter VI-A, is more than one lakh fifty thousand rupees but does not exceed five lakh rupees, fifteen per cent of the aggregate of the sums referred to in sub-section (2);

(iii) in the case of an individual or a Hindu undivided family, whose gross total income before giving effect to deductions under Chapter VI-A, exceeds five lakh rupees, nil.]

(2) The sums referred to in sub-section (1) shall be any sums paid or deposited in the previous year by the assessee 3[J10] [* * *]—

(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, 4[J11] [not being an annuity plan referred to in clause (xiiia)], 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 wife or children, insofar 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;

5[J12] (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) 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, where such sums are deposited in an account standing in the name of the persons specified in sub-section (4);

(ix) As subscription to any such security of the Central Government 6[J13] [or any such deposit scheme] as that Government may, by notification7[J14] in the Official Gazette, specify in this behalf;

(x) 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);

8[J15] (xi) 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;

(xii) as a contribution, 9[J16] [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) deemed to have been made under sub-clause (a) of clause (8) of section 19 of the Unit Trust of India Act, 1963 (52 of 1963);

10[J17] (xiii) as a contribution 11[J18] [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 notified under clause (23D) of section 10, as the Central Government may, by notification in the Official Gazette, specify in this behalf;

12[J19] [(xiiia) to effect or to keep in force a contract for such annuity plan of the Life Insurance Corporation 13[J20] [or any other insurer] as the Central Government may, by notification14[J21] in the Official Gazette, specify;

(xiiib) as subscription, not exceeding ten thousand rupees, to any units of any Mutual Fund notified under clause (23D) of section 10 or the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963) under any plan formulated in accordance with such scheme as the Central Government may, by notification in the Official Gazette, specify in this behalf;

(xiiic) as a contribution by an individual to any pension fund set up by any Mutual Fund15[J22] notified under clause (23D) of section 10 16[J23] [or by the Unit Trust of India17[J24] established under the Unit Trust of India Act, 1963 (52 of 1963)], as the Central Government may, by notification in the Official Gazette, specify in this behalf;]

18[J25] (xiv) as subscription to any such deposit scheme of 19[J26] [, 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;

20[J27] [(xiva) 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, not being a scheme the interest on deposits where under qualifies for the purposes of computing the deduction under section 80L, as the Central Government may, by notification in the Official Gazette, specify in this behalf;]

21[J28] [(xivb) 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);]

(xv) for the purposes of purchase or construction of a residential house property the 22[J29] [* * *] 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 instilment 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 installment 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

(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 23[J30] [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

24[J31] [(6A) The assessor’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]

(xvii) As subscription to any units of any mutual fund referred to in clause (23D) of section 10 and approved by the Board on an application made by such mutual fund in the prescribed form32[J39] :

Provided that where a deduction is claimed and allowed under this clause with reference to the cost of units, the cost of such units shall not be taken into account for the purposes of sections 54EA and 54EB:

Provided further that this clause shall apply if the amount of subscription 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 Explanation to clause (xvi) in sub-section (2) of section 88.]

33[J40] [(2A) 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 as is not in excess of twenty per cent of the actual capital sum assured.

Explanation.—in calculating any such actual 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.]

34[J41] [(3) The sums referred to in sub-section (2) shall be paid or deposited at any time during the previous year, and the assessee, being an individual or a Hindu undivided family, shall be entitled to a deduction under sub-section (1) on so much of the aggregate of such sums paid or deposited as does not exceed the total income of the assessee, chargeable to tax during the relevant previous year.]

(4) The persons referred to in sub-section (2) shall be the following, namely:—

35[J42] [(a) for the purposes of clauses (i), (v), (xii) and (xiii) 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,—

(i) In the case of an individual, the individual, the wife or husband and any child of such individual, and

[(ii) Omitted by the Finance Act, 1994, w.r.e.f. 1-4-1991.]

(i) In the case of an individual, such individual or a minor of whom he is the guardian;

(ii) In the case of a Hindu undivided family, any member of the family;

[(iii) Omitted by the Finance Act, 1994, w.r.e.f. 1-4-1991.]

37[J44] [(d) for the purpose of clause (xivb) of that sub-section, in the case of an individual, any two children of such individual.]

38[J45] [(5) Where the aggregate of any sums specified in clause (i) to clause (xvii) of sub-section (2) exceeds an amount of one hundred 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 one hundred thousand rupees:

Provided that where the aggregate of any sums specified in clause (i) to clause (xv) of sub-section (2) exceeds an amount of seventy thousand rupees, a deduction under sub-section (1) in respect of such sums shall be allowed with reference to so much of the aggregate as does not exceed an amount of seventy thousand rupees:

Provided further that where the aggregate of any sums specified in clause (xv) of sub-section (2) exceeds an amount of twenty thousand rupees, a deduction under sub-section (1) in respect of such sums shall be allowed with reference to so much of the aggregate as does not exceed an amount of twenty thousand rupees:]

39[J46] [Provided also that where the aggregate of any sum specified in clause (xivb) of sub-section (2) exceeds an amount of twelve thousand rupees in respect of a child, a deduction under sub-section (1) in respect of such sum shall be allowed with reference to so much of the aggregate as does not exceed an amount of twelve thousand rupees in respect of such child.]

40[J47] [(5A) Omitted by the Finance Act, 2002, w.e.f. 1-4-2003.]

41[J48] [(6) Omitted by the Finance Act, 2002, w.e.f. 1-4-2003.]

(7) 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 42[J49] [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 (xii) or clause (xiii) 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 participation have been paid for five years; or

(iii) transfers the house property referred to in clause (xv) of sub-section (2) before the expiry of five years from the end of the financial year in which possession of such property 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), (xii), (xiii) and (xv) of sub-section (2), paid in such previous year; and

(b) the aggregate amount of the deductions of income-tax so allowed in respect of the previous year or years preceding such previous year, shall be deemed to be tax payable by the assessee in the assessment year relevant to such previous year and shall be added to the tax on the total income of the assessee with which he is chargeable for such assessment year.]

43[J50] [(7A) 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-tax 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 tax payable by the assessee for the assessment year relevant to such previous year and shall be added to the amount of income-tax on the total income of the assessee with which he is chargeable for such assessment 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 company.]

(8) In this section,—

(i) "Contribution" to any fund shall not include any sums in repayment of loan;

(ii) "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 thereon) 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;

(iii) "Life Insurance Corporation" means the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 195644[J51] (31 of 1956);

(iv) "public company" shall have the same meaning as in section 3 of the Companies Act, 195645[J52] (1 of 1956);

(v) "security" means a Government security as defined in clause (2) of section 2 of the Public Debt Act, 194446[J53] (18 of 1944);

(vi) "transfer" shall be deemed to include also the transactions referred to in clause (f) of section 269UA.

47[J54] [(9) No deduction from the amount of income-tax shall be allowed under this section to an assessee, being an individual or a Hindu undivided family for the assessment year beginning on the 1st day of April, 2006 and subsequent years.]

DEPARTMENTAL VIEW

1. The rebate under the section is also available in respect of any sums paid in the previous year by the assessee individual out of his income chargeable to tax, 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. The rebate is also 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. [Circular No. 574, dated 22nd August, 1990]

[88A. Rebate in respect of investment in certain new shares or units:-

Omitted by the Finance (No. 2) Act, 1996, w.r.e.f. 1-4-1994. It was inserted by the Finance Act, 1990, w.e.f. 1-4-1991 and amended by the Finance Act, 1994, w.r.e.f. 1-4-1991.]

1[J55] [88B. Rebate of income-tax in case of individuals of sixty-five years or above:-

Omitted by the Finance Act, 2005, w.e.f. 1-4-2006.]

1[J56] [88C. Rebate of income-tax in case of women below sixty-five years:-

Omitted by the Finance Act, 2005, w.e.f. 1-4-2006.]

1[J57] [88D. Rebate of income-tax in case of certain individuals:-

Omitted by the Finance Act, 2005, w.e.f. 1-4-2006.]

1[J58] [88E. Rebate in respect of securities transaction tax:-

(1) Where total income of an assessee in a previous year includes any income, chargeable under the head "Profits and gains of business or profession", arising from taxable securities transactions, he shall be entitled to a deduction, from the amount of income-tax on such income arising from such transactions, computed in the manner provided in sub-section (2), of an amount equal to the securities transaction tax paid by him in respect of the taxable securities transactions entered into in the course of his business during that previous year:

Provided that no deduction under this sub-section shall be allowed unless the assessee furnishes along with the return of income, evidence of payment of securities transaction tax in the prescribed form2[J59] :

Provided further that the amount of deduction under this sub-section shall not exceed the amount of income-tax on such income computed in the manner provided in sub-section (2).

(2) For the purposes of sub-section (1), the amount of income-tax on the income arising from the taxable securities transactions, referred to in that sub-section, shall be equal to the amount calculated by applying the average rate of income-tax on such income.

Explanation.—For the purposes of this section, the expressions "taxable securities transaction" and "securities transaction tax" shall have the same meanings respectively assigned to them under Chapter VII of the Finance (No. 2) Act, 2004.]

3[J60] [(3) No deduction under this section shall be allowed in, or after, the assessment year beginning on the 1st day of April, 2009.]

B.— Relief for income-tax]

1[J61] [89. 2[J62] Relief when salary, etc., is paid in arrears or in advance3[J63] :-

Where an assessee is in receipt of a sum in the nature of salary, being paid in arrears or in advance or is in receipt, in any one financial year, of salary for more than twelve months or a payment which under the provisions of clause (3) of section 17 is a profit in lieu of salary, or is in receipt of a sum in the nature of family pension as defined in the Explanation to clause (iia) of section 57, being paid in arrears, due to which his total income is assessed at a rate higher than that at which it would otherwise have been assessed, the Assessing Officer shall, on an application made to him in this behalf, grant such relief as may be prescribed.]

DEPARTMENTAL VIEW

1. Belief under this section read with rule 21A would be admissible in respect of encashment of leave salary by an employee when in service. The encashment of leave salary on retirement is exempt under section 10(10AA). [Circular No. 431, dated 12th September, 1985]

2. he relief under this section is to be given in the assessment in which the extra payment by way of arrears, advance, etc. is taxed. The assessee should be asked for a true and authentic statement of the total income of the earlier years to which the arrears pertain. There is no warrant for issuing a notice under section 148 or calling for returns of income of the earlier years. [Circular No. 331, dated 22nd March, 1982]

[89A. Tax relief in relation to export turnover:-

This section was inserted by the Finance Act, 1982, w.e.f. 1-6-1982 but was omitted by the Finance Act, 1983, w.e.f. 1-4-1983.]

[J1]Substituted for "Relief in respect of income-tax" by the Finance Act, 1990, w.e.f. 1-4-1991. Earlier, it was amended by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1968.

[J2]Chapter sub-headings 'A' and 'B', along with sections 87, 88 and 88A inserted by the Finance Act, 1990, w.e.f. 1-4-1991.

[J3]Substituted for "88 and 88A" by the Finance Act, 1992, w.e.f. 1-4-1993.

[J4]Substituted for ", 88B and 88C" by the Finance (No. 2) Act, 2004, w.e.f. 1-4-2005. Earlier, ", 88B and 88C" were substituted for "and 88B" by the Finance Act, 2000, w.e.f. 1-4-2001.

[J5]Inserted by the Finance Act, 1992, w.e.f. 1-4-1993.

[J6]Inserted by the Finance Act, 2000, w.e.f. 1-4-2001.

[J7]Inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-4-2005

[J8]No rebate shall be allowed under this section from Assessment Year 2006-07 and onwards: sub-section (9).

[J9]Substituted by the Finance Act, 2002, w.e.f. 1-4-2003. Prior to the substitution, sub-section (1), as originally enacted, read as under:

"(1) Subject to the provisions of this section, an assessee, being—

(a) an individual, or

(b) a Hindu undivided family, 1[* * *]

2[(c) Omitted by the Finance Act, 1994, w.r.e.f. 1-4-1991.]

shall be entitled to a deduction, from the amount of income-tax (as computed before allowing the deductions under this Chapter) on his total income with which he is chargeable for any assessment year, of an amount equal to twenty per cent of the aggregate of the sums referred to in sub-section (2):

3[Provided that in the case of an individual, whose income, derived from the exercise of his profession as an author, playwright, artist, musician, actor or sportsman (including an athlete), is twenty-five per cent or more of his total income, the provisions of this sub-section shall have effect as if for the words "twenty per cent", the words "twenty-five per cent" had been substituted:]

4[Provided further that an individual shall be entitled to a deduction of an amount equal to thirty per cent of the aggregate of the sums referred to in sub-section (2), if his income chargeable under the head "Salaries"—

(a) does not exceed one lakh rupees during the previous year before allowing deduction under section 16; and

(b) is not less than ninety per cent of his gross total income as defined in sub-section (5) of section 80B.]"

1 The word "or" omitted by the Finance Act, 1994, w.r.e.f. 1-4-1991.

2 Prior to the omission, clause (c), as originally enacted, read as under:

"(c) 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,"

3 Inserted by the Finance Act, 1992, w.e.f. 1-4-1993.

4 Inserted by the Finance Act, 2001, w.e.f. 1-4-2002.

[J10]The words "out of his income chargeable to tax" omitted by the Finance Act, 2002, w.e.f. 1-4-2003.

[J11]Substituted for "not being an annuity plan referred to in clause (ii) of sub-section (1) of section 80CCA" by the Finance Act, 1992, w.e.f. 1-4-1993.

[J12]Public provident fund has been notified vide SO 55(E), dated 31-1-1991.

[J13]Inserted by the Finance Act, 1992, w.e.f. 1-4-1993.

[J14]The National Savings Scheme, as contained in the National Savings Scheme Rules, 1992 has been specified vide Notification No. GSR 819(E), dated 21-10-1992.

[J15]National Savings Certificates (VIII Issue) have been specified vide SO 54(E), dated 31-1-1991.

[J16]Substituted for "by" by the Finance Act, 1994, w.r.e.f. 1-4-1991.

[J17]Dhanraksha, 1989 plan of the LIC Mutual Fund has been specified vide SO 56(E), dated 31-1-1991.

[J18]Substituted for "by any individual", by the Finance Act, 1994, w.r.e.f. 1-4-1991.

[J19]Inserted by the Finance Act, 1992, w.e.f. 1-4-1993.

[J20]Inserted by the Finance Act, 2001, w.e.f. 1-4-2002.

[J21]New Jeevan Dhara-I and New Jeevan Akshay-I Plans of LIC have been specified: Notification No. 53/2003, dated 18-3-2003. Earlier, Jeevan Dhara and Jeevan Akshay were specified vide GSR 801(E), dated 7-10-1992 and New Jeevan Dhara and New Jeevan Akshay vide Notification No. 71/2002, dated 2-4-2002, w.r.e.f. 1-2-2002.

[J22] Kothari Pioneer Pension Plan has been specified vide Notification No. SO 76(E), dated 30-1-1997.

[J23] Inserted by the Finance Act, 1994, w.e.f. 1-4-1995.

[J24]The Retirement Benefit Unit Scheme has been specified vide Notification No. 9598, dated 1-9-1994.

[J25]Home Loan Account Scheme of the National Housing Bank has been specified vide SO 57(E), dated 31-1-1991.

[J26]Inserted by the Finance Act, 1992, w.e.f. 1-4-1993.

[J27]Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1992.

[J28]Inserted by the Finance Act, 2003, w.e.f. 1-4-2004.

[J29] The words "construction of which is completed after the 31st day of March, 1987, and the" omitted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1992.

[J30]Substituted for "approved for the purposes of" by the Finance Act, 2000, w.e.f. 1-4-2000.

[J31]Inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-4-2005.

[J32]Inserted by the Finance Act, 1992, w.e.f. 1-4-1992.

[J33]Inserted by the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997.

[J34]Inserted by the Finance Act, 1997, w.e.f. 1-4-1998.

[J35]See rule 20 and Form No. 59.

[J36]Substituted by the Finance Act, 2003, w.e.f. 1-4-2004. Prior to the substitution, the Explanation, as originally enacted, read as under:

"Explanation.—For the purposes of this clause,—

1[(i) "eligible issue of capital" means an issue made by a public company formed and registered in India or a public financial institution and the entire proceeds of the issue is utilized wholly and exclusively either for the purposes of developing, maintaining and operating an infrastructure facility or for generating, or for generating and distributing, power or for providing telecommunication services whether basic or cellular;]

(ii) "infrastructure facility" shall have the meaning assigned to it in 2[the Explanation to sub-section (4) of section 80-IA];

(iii) "public company" shall have the meaning assigned to it in section 3 of the Companies Act, 1956 (1 of 1956);

3[(iv) "public financial institution" shall have the meaning assigned to it in section 4A of the Companies Act, 1956;]"

1 Substituted by the Finance Act, 1997, w.e.f. 1-4-1998. Prior to the substitution, clause (i) read as under:

"(i) "eligible issue of capital" means an issue made by a public company formed and registered in India and the issue is wholly and exclusively for the purposes of developing, maintaining and operating an infrastructure facility or for generating, or for generating and distributing, power;"

2 Substituted for "clause (ca) of sub-section (12) of section 80-IA" by the Finance Act, 1999, w.e.f. 1-4-2000.

3 Inserted by the Finance Act, 1997, w.e.f. 1-4-1998.

[J37]

[J38]Ibid.

[J39]See rule 20A and Form No. 59A.

[J40]Inserted by the Finance Act, 2003, w.e.f. 1-4-2004.

[J41]Inserted by the Finance Act, 2002, w.e.f. 1-4-2003. Sub-section (3), as originally enacted, was omitted by the Finance Act, 1995, w.e.f. 1-4-1996.

[J42]Substituted by the Finance Act, 1994, w.r.e.f. 1-4-1991.

[J43]Substituted for "clauses (v) and (viii)" by the Finance Act, 1994, w.r.e.f. 1-4-1991.

[J44]Inserted by the Finance Act, 2003, w.e.f. 1-4-2004. Earlier, clause (d) was omitted by the Finance Act, 1994, w.r.e.f. 1-4-1991.

[J45]Substituted by the Finance Act, 2002, w.e.f. 1-4-2003. Prior to the substitution, sub-section (5), as originally enacted, read as under:

"(5) Where the aggregate of any sums specified in clause (xv) of sub-section (2) exceeds an amount of 1[twenty 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 1[twenty thousand] rupees."

1 Substituted for "ten thousand" by the Finance Act, 2000, w.e.f. 1-4-2001.

[J46]Inserted by the Finance Act, 2003, w.e.f. 1-4-2004.

[J47]Prior to the omission, sub-section (5A), as inserted by the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997, read as under:

"(5A) Where the aggregate of any sums specified in clause (i) to clause (xv) of sub-section (2) exceeds an amount of sixty 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 sixty thousand rupees:

Provided that in the case of an individual referred to in the proviso to sub-section (1), the provisions of this sub-section shall have effect as if for the words "sixty thousand rupees", the words "seventy thousand rupees" had been substituted."

[J48]Prior to the omission, sub-section (6), as originally enacted, read as under:

"(6) The deduction from the amount of income-tax under sub-section (1) shall not exceed—

(i) in the case of an individual, 1[whose income, derived from the exercise of his profession as an author, playwright, artist, musician, actor or sportsman (including an athlete), is twenty-five per cent or more of his total income, seventeen thousand five hundred] rupees;

(ii) in any other case, 2[sixteen thousand rupees]."

1 Substituted for "being an author, playwright, artist, musician, actor or sportsman (including an athlete), fourteen thousand," by the Finance Act, 1992, w.e.f. 1-4-1993.

2 Substituted for "fourteen thousand rupees" by the Finance Act, 2000, w.e.f. 1-4-2001. Earlier, "fourteen thousand rupees" was substituted for "twelve thousand rupees" by the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997 and "twelve thousand rupees" were substituted for "ten thousand rupees" by the Finance Act, 1992, w.e.f. 1-4-1993.

[J49]Substituted for "contract of insurance, before premiums have been paid for two years; or" by the Finance Act, 1995, w.e.f. 1-4-1996.

[J50]Inserted by the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997.

[J51]

[J52]

[J53]

[J54]Inserted by the Finance Act, 2005, w.e.f. 1-4-2006.

[J55]Prior to the omission, section 88B as substituted by the Finance Act, 1997, w.e.f. 1-4-1998 and amended subsequently, read as under:

"88B. Rebate of income-tax in case of individuals of sixty-five years or above.—An assesses, being an individual resident in India, who is of the age of sixty-five years or more at any time during the previous year shall be entitled to a deduction from the amount of income-tax (as computed before allowing the deductions under this Chapter) on his total income, with which he is chargeable for any assessment year, of an amount equal to hundred per cent of such income-tax or an amount of 1[twenty thousand] rupees, whichever is less."

1 Substituted for "fifteen thousand" by the Finance Act, 2003, w.e.f. 1-4-2004. Earlier "fifteen thousand" was substituted for "ten thousand" by the Finance Act, 2000, w.e.f. 1-4-2001.

Earlier, section 88B was inserted by the Finance Act, 1992, w.e.f. 1-4-1993 and amended by the Finance Act, 1993, w.e.f. 1-4-1994; Finance Act, 1994, w.e.f. 1-4-1995 and the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997.

[J56]Prior to the omission, section 88C, as inserted by the Finance Act, 2000, w.e.f. 1-4-2001, read as under:

"88C. Rebate of income-tax in case of women below sixty-five years.—An assesses,—

(a) being a woman resident in India; and

(b) below the age of sixty-five years, at any time during the previous year,

shall be entitled to a deduction from the amount of income-tax (as computed before allowing the deductions under this Chapter) on her total income, with which she is chargeable for any assessment year, of an amount equal to hundred per cent of such income-tax or an amount of five thousand rupees, whichever is less."

[J57]Prior to the omission, section 88D, as inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-4-2005, read as under:

"88D. Rebate of income-tax in case of certain individuals.—An assesses, being an individual resident in India,—

(a) whose total income does not exceed one hundred thousand rupees, shall be entitled to a deduction from the amount of income-tax (as computed before allowing the deductions under this Chapter) on his total income with which he is chargeable for any assessment year, of an amount equal to hundred per cent of such income-tax;

(b) whose total income exceeds one hundred thousand rupees and the income-tax payable on such total income (as computed before allowing the deductions under this Chapter) exceeds the amount by which such total income is in exceeds of one hundred thousand rupees, shall be entitled to a deduction from the amount of income-tax on his total income, of an amount equal to the amount by which the income-tax payable on such total income is in excess of the amount by which the total income exceeds one hundred thousand rupees."

[J58]Inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-4-2005.

[J59]See rule 20AB and Form Nos. 10DB and 10DC.

[J60]Inserted by the Finance Act, 2008, w.e.f. 1-4-2008.

[J61]Substituted by the Finance Act, 2002, w.r.e.f. 1-4-1996. Prior to the substitution, section 89(1) read as under:

89. Relief when salary, etc., is paid in arrears or in advance.—(1) Where, by reason of any portion of an assessor’s salary being paid in arrears or in advance or by reason of his having received in any one financial year salary for more than twelve months or a payment which under the provisions of clause (3) of section 17 is a profit in lieu of salary, his income is assessed at a rate higher than that at which it would otherwise have been assessed, *[the †[Assessing] Officer shall, on an application made to him in this behalf, grant such relief as may be prescribed]."

Substituted for "the Commissioner may, on an application made in this behalf by the assesses, grant such relief as he considers appropriate" by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971.

Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

Sub-section (2) was amended by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971 and the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988 and was omitted by the Finance Act, 1988, w.e.f. 1-4-1989.

[J62]See Circular Nos. 1-22/40, dated 4-10-1940; 9D(LIII-6), dated 17-3-1966; 14D(LIII-7), dated 19-4-1966; 239, dated 16-5-1978; 331, dated 22-3-1982 and 431, dated 12-9-1985 and Letter F. No. 7/60/65-ITJ, dated 3-11-1965.

[J63]See rules 21A, 21AA, 21B and Form No. 10E.