Insertion of new section 80DDA

Section 15 of the Finance Act, 1995 deals with insertion of new section 80DDA. Insertion of new section 80DDA. 15. After section 80DD of the Income-tax Act, the following section shall be inserted, with effect from the 1st day of April, 1996, namely.— Deduction in respect of deposit made for maintenance of handicapped dependent '80DDA.

Insertion of new section 80DDA.

15. After section 80DD of the Income-tax Act, the following section shall be inserted, with effect from the 1st day of April, 1996, namely.—

Deduction in respect of deposit made for maintenance of handicapped dependent

'80DDA. (1) In computing the total income of an assessee who is resident in India, being an individual or a Hindu undivided family, there shall be deducted, in accordance with and subject to the provisions of this section, an amount not exceeding twenty thousand rupees paid or deposited by him in the previous year, out of his income chargeable to tax, under any scheme framed in this behalf by the Life Insurance Corporation or the Unit Trust of India subject to the conditions specified in sub-section (2) and approved by the Board in this behalf.

(2) The deduction under sub-section (1) shall be allowed only if the following conditions are fulfilled, namely:—

(a) the scheme referred to in sub-section (1) provides for payment. of annuity or lump sum amount for the benefit of a handicapped dependant in the event of the death of the individual or the member of the Hindu undivided family in whose name subscription to the scheme has been made;

(b) the assessee nominates either the handicapped dependant or any other person or a trust to receive the payment on his behalf, for the benefit of the handicapped dependant.

(3) If the handicapped dependant predeceases the individual or the member of the Hindu undivided family referred to in sub-section (2), an amount equal to the amount paid or deposited under sub-section (1) shall be deemed to the income of the assessee of the previous year in which such amount is received by the assessee and shall accordingly be chargeable to tax as the income of that previous year.

(4) In this section,—

(a) "Government hospital" shall have the meaning assigned to it in the Explanation to section 80DD;

(b) "handicapped dependant" shall mean a person who—

(i) is a relative of the individual or, as the case may be, is a member of the Hindu undivided family and is not dependant on any person other than such individual or Hindu undivided family for his support or maintenance; and

(ii) is suffering from a permanent physical disability (including blindness) or is subject to mental retardation, being a permanent physical disability or mental retardation specified in the rules made by the Board for the purposes of section 80DD, which is certified by a physician, a surgeon, an oculist or a psychiatrist, as the case may be, working in a Government hospital, and which has the effect of reducing considerably such person's capacity for normal work or engaging in a gainful employment or occupation;

(c) "Life Insurance Corporation" shall have the same meaning as in clause (iii) of sub-section (8) of section 88;

(d) "Unit Trust of India" means the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963).'.

[Finance Act, 1995]

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Section 15, The Finance Act, 1995 (Act 22 of 1995).