Income Tax Act

Official PDF pages 186–190

SOURCE PDF PAGE 186
the assessee, being the parent or guardian of such minor, subject to the condition
that the aggregate amount of deduction under sub-section (3) and this sub-section
shall not exceed   `   50000.
(5) No deduction under sub-sections (3) and (4) shall be allowed in respect of the
amount on which a deduction has been claimed and allowed under section 123.
(6) Any amount standing to the credit of the assessee or a minor, in his account or
the account of a minor, as the case may be, referred to in sub-sections (1), (3) and
(4) and paragraph 1( y ) of Schedule XV, in respect of which a deduction has been
allowed together with the amount accrued thereon, received by the assessee or his
nominee, in whole or in part, in any tax year,—
( a )   on account of closure or his opting out of the pension scheme referred
to in sub-sections (1) and (3); or
( b )   as pension received from the annuity plan purchased or taken on such
closure or opting out,
the whole of the amount referred to in clause ( a ) or ( b ) shall be deemed to be the
income of the individual or his nominee, in the tax year in which such amount is
received, and shall accordingly be charged to tax as income of that tax year.
(7) The amount received by the nominee, on the death of the assessee, under the
circumstances referred to in sub-section (6)( a ), shall not be deemed to be the
income of the nominee.
(8) The amount received by a person, being the parent or guardian or nominee of a
minor on account of closure of the pension scheme, due to the death of the minor,
referred to in sub-section (4), shall not be deemed to be the income of such person.
(9) For the purposes of this section, the assessee shall not be deemed to have received
any amount in the tax year, if such amount is used for purchasing an annuity plan
in the same tax year.
(10) Where any amount paid or deposited by the assessee has been allowed as a
deduction under sub-section (3), no deduction with reference to such amount shall
be allowed under section 123 for that tax year.
(11) Any amount standing to the credit of the assessee, being a subscriber to Uni -
fied Pension Scheme, in his account referred to in sub-sections (1) and (3), and
paragraph 1( y ) of Schedule XV, in respect of which a deduction has been allowed
together with the amount accrued thereon, received by the assessee or his nominee,
in whole or in part, in any tax year on account of his superannuation or voluntary
retirement or retirement under Fundamental Rules 56( j ) (which is not treated as
penalty under the Central Civil Services (Classification, Control and Appeal) Rules,
1965), the whole of the amount shall be deemed to be the income of the assessee or
his nominee, as the case may be, in the tax year in which such amount is received,
and shall accordingly be charged to tax as income of that tax year.
(12) For the purposes of sub-section (11), the assessee shall be deemed not to have
received any amount in the tax year if such amount is transferred to pool corpus
from individual corpus on account of his superannuation or voluntary retirement
or retirement under Fundamental Rules 56( j ) (which is not treated as penalty under
the Central Civil Services (Classification, Control and Appeal) Rules, 1965), as may
be applicable.

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SOURCE PDF PAGE 187
(13) For the purposes of this section,—
( a )   “pool corpus” and “individual corpus” shall have the same meaning as
in Notification F. No. FX-1/3/2024-PR of the Department of Financial
Services, dated the 24th January, 2025.
( b )   “salary” includes dearness allowance, if the terms of employment so
provide, but excludes all other allowances and perquisites.
Deduction in respect of contribution to   Agnipath   Scheme.
125.   (1) An assessee, being an individual who has enrolled in the   Agnipath   Scheme
and subscribes to the   Agniveer   Corpus Fund on or after the 1st November,
2022, shall be allowed a deduction in the computation of his total income, of the
whole of the amount paid or deposited in his account in the said Fund during the
tax year.
(2) Where the Central Government makes any contribution to the account of an
assessee in the Fund referred to in sub-section (1), the assessee shall be allowed a
deduction in the computation of his total income of the whole of the amount so
contributed.
(3) For the purposes of this section,—
( a )   “ Agnipath   Scheme” means the scheme for enrolment in the Indian Armed
Forces introduced   vide   letter No. 1(23)2022/D(Pay/Services), dated the
29th December, 2022, of the Government of India in the Ministry of
Defence;
( b )   “ Agniveer   Corpus Fund” means a fund in which consolidated contri -
butions of all the   Agniveers   and matching contributions of the Central
Government along with interest on both these contributions are held.
Deduction in respect of health insurance premia.
126.   (1) An assessee, being an individual or a Hindu undivided family, shall be
allowed a deduction of a sum as specified in sub-sections (2) to (8), payment
of which is made by any mode as specified in sub-section (9), out of his income
chargeable to tax in the tax year.
(2) In the case of an assessee, being an individual, the sum referred to in sub-section
(1), shall be the aggregate of the whole of the amount paid—
( a )   to effect or keep in force an insurance on the health (herein referred to
as health insurance) of the assessee or his family, or any contributions
made to the Central Government Health Scheme or such other scheme,
as may be notified by the Central Government in this behalf, or any pay -
ment made for preventive health check-up of the assessee or his family,
up to   `   25000 in aggregate;
( b )   to effect or to keep in force the health insurance, or any payment made
for preventive health check-up, for the parent or parents of the assessee,
up to   `   25000 in aggregate;
( c )   on account of medical expenditure incurred on the health of the assessee
or any member of his family, up to   `   50000 in aggregate; and
( d )   on account of medical expenditure incurred on the health of any parent
of the assessee, up to   `   50000 in aggregate.

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(3) The deduction in respect of amounts referred to in sub-section (2)( a ) or (2)( b ),
which are paid on account of preventive health check-up, shall be allowed up to
`   5000 in aggregate.
(4) The amount of sum referred to in sub-section (2) shall not exceed   `   50000 in
aggregate of the sum specified under sub-section (2)( a ) and ( c ) or aggregate of the
sum specified under sub-section (2)( b ) and ( d ).
(5) In the case of an assessee, being a Hindu undivided family, the sum referred to
in sub-section (1), shall be the aggregate of the whole of the amount paid—
( a )   to effect or keep in force an insurance on the health of any member of
such Hindu undivided family, up to   `   25000 in the aggregate; and
( b )   on account of medical expenditure incurred on the health of any member
of such Hindu undivided family, up to   `   50000 in the aggregate.
(6) The amount of sum under sub-section (5) shall not exceed   `   50000 in the aggre -
gate of the sum specified under sub-section (5)( a ) and ( b ).
(7) For the purposes of this section, where the amount is paid on account of medical
expenditure incurred on the health of a senior citizen under sub-section (2)( c ) or
( d ) or (5)( b ), deduction shall be allowed, if no amount has been paid to effect or to
keep in force the health insurance of such person.
(8) Where the sum specified in sub-section (2)( a ) or ( b ) or (5)( a ) is paid to effect or
keep in force the health insurance of any person specified therein, and—
( a )   such person is a senior citizen, the amount of sum as provided in such
clauses, shall be substituted with   `   50000 for   `   25000; and
( b )   such sum is paid in lump sum in the tax year for more than a year, a
deduction shall be allowed for each of the relevant tax year equal to the
appropriate fraction of such amount.
(9) For the purposes of deduction under sub-section (1), the payment shall be made
by any mode,—
( a )   including cash, in respect of any sum paid on account of preventive
health check-up; or
( b )   other than cash in all other cases not falling under clause ( a ).
(10) For the purposes of this section,—
( a )   “appropriate fraction” means the fraction where the numerator is one,
and the denominator is the total number of relevant tax years;
( b )   “family” means the spouse and dependant children of the assessee;
( c )   “relevant tax year” means the tax year beginning with the tax year in
which such lump sum amount is paid and the subsequent tax year or
years during which the health insurance remains in force.
(11) The health insurance referred to in this section shall be as per the scheme
made in this behalf by—
( a )   the General Insurance Corporation of India formed under section 9 of
the General Insurance Business (Nationalisation) Act, 1972 (57 of 1972)
and approved by the Central Government in this behalf; or
( b )   any other insurer and approved by the Insurance Regulatory and
Development Authority established under section 3(1) of the Insurance
Regulatory and Development Authority Act, 1999 (41 of 1999).

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SOURCE PDF PAGE 189
Deduction in respect of maintenance including medical treatment of a
dependant who is a person with disability.
127.   (1) An assessee being an individual or a Hindu undivided family, who is a
resident in India, shall be allowed a deduction up to   `   75000 from his gross
total income of a tax year, subject to the provisions of this section, if during that
year he has—
( a )   incurred expenditure for the medical treatment (including nursing),
training and rehabilitation of a dependant, being a person with disability;
or
( b )   paid or deposited any amount under a scheme framed by the Life
Insurance Corporation or any other insurer or the Administrator, or the
specified company, for the maintenance of a dependant, being a person
with disability, subject to the conditions specified in sub-section (2) and
approved by the Board in this behalf.
(2) The deduction under sub-section (1)( b ) shall be allowed only if the following
conditions are fulfilled:—
( a )   the scheme referred to in sub-section (1)( b ) provides for payment of an
annuity or lump sum amount for the benefit of a dependant, being a
person with disability—
( i )   on the death of the individual or the member of the Hindu undivided
family, in whose name the scheme was subscribed; or
( ii )   on attaining the age of sixty years or more by such individual or
the member of the Hindu undivided family, and the payment or
deposit to such scheme has been discontinued;
( b )   the assessee nominates the dependant, being a person with disability or
any other person or a trust to receive the payments on behalf of and for
the benefit of such dependant.
(3) If the dependant as referred to in sub-section (1) is a person with severe disability,
the amount of deduction as referred to in sub-section (1) shall be substituted with
“ `   125000” for “ `   75000”.
(4) In the event of death of the dependant, being a person with disability, before the
individual or the member of the Hindu undivided family mentioned in sub-section
(2), the amount paid or deposited under sub-section (1)( b ) shall be deemed to be the
income of the assessee of the tax year in which it is received and shall accordingly
be chargeable to tax.
(5) The provisions of sub-section (4) shall not apply to the amount received by the
dependant, being a person with disability, before his death, as an annuity or lump
sum by application of the condition referred to in sub-section (2)( a )( ii ).
(6) The assessee claiming deduction under this section, shall furnish a copy of the
medical certificate issued by the medical authority in such form and manner as
may be prescribed, along with the return of income under section 263 for the tax
year in which the deduction is claimed.

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(7) If the certificate referred to in sub-section (6), specifies that the condition of
disability requires reassessment of its extent after a period stipulated in it, the
deduction under this section shall not be allowed for any tax year succeeding the tax
year in which the said certificate expires, unless a new certificate is obtained from
the medical authority in such form and manner as may be prescribed, and a copy
thereof is submitted along with the return of income under section 263.
(8) The dependant mentioned in this section shall not include a person who has
claimed deduction under section 154 in computing his total income for the tax year.
(9) For the purposes of this section,—
( a )   “Administrator” means the Administrator as referred to in section 2( a )
of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002
(58 of 2002);
( b )   “dependant” means—
( i )   in the case of an individual, the spouse, children, parents, brothers
and sisters of the individual or any of them;
( ii )   in the case of a Hindu undivided family, a member of the Hindu
undivided family,
dependant wholly or mainly on such individual or Hindu undivided
family for his support and maintenance;
( c )   “disability” shall have the same meaning as assigned to it in section
2( i ) of the Persons with Disabilities (Equal Opportunities, Protection
of Rights and Full Participation) Act, 1995 (1 of 1996) and includes
“autism”, “cerebral palsy” and “multiple disability” respectively referred
to in section 2( a ), ( c ) and ( h ) of the National Trust for Welfare of Persons
with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities
Act, 1999 (44 of 1999);
( d )   “Life Insurance Corporation” means the Life Insurance Corporation of
India established under the Life Insurance Corporation Act, 1956 (31 of
1956);
( e )   “medical authority” means the medical authority as referred to in section
2( p ) of the Persons with Disabilities (Equal Opportunities, Protection of
Rights and Full Participation) Act, 1995 (1 of 1996) or such other medical
authority as may, by notification, be specified by the Central Government
for certifying “autism”, “cerebral palsy”, “multiple disabilities”, “person
with disability” and “severe disability” respectively referred to in section
2( a ), ( c ), ( h ), ( j ) and ( o ) of the National Trust for Welfare of Persons with
Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act,
1999 (44 of 1999);
( f )   “person with disability” means a person as referred to in section 2( t )
of the Persons with Disabilities (Equal Opportunities, Protection of
Rights and Full Participation) Act, 1995 (1 of 1996) or section 2( j ) of the
National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental
Retardation and Multiple Disabilities Act, 1999 (44 of 1999);