Schedule XV — DEDUCTION IN RESPECT OF LIFE INSURANCE PREMIA, CONTRIBUTION TO PROVIDENT FUND, SUBSCRIPTION TO CERTAIN EQUITY SHARES, ETC.

[See section 123]
DEDUCTION IN RESPECT OF LIFE INSURANCE PREMIA,
CONTRIBUTION TO PROVIDENT FUND, SUBSCRIPTION
TO CERTAIN EQUITY SHARES, ETC.
Sums qualifying as deduction.
1. For any tax year, the following amounts shall qualify as deduction for the purpose
of section 123—
( a) premium paid for a life insurance policy––
( i) in the case of an individual, on life of such individual, spouse of
the individual and any child of the individual;
( ii) in the case of a Hindu undivided family, on life of any member of
the Hindu undivided family,
subject to paragraph 2;
( b) sum paid under a deferred annuity contract other than the annuity plan
referred to in clause (l) on life of the individual, spouse of the individual
and any child of the individual, and such contract does not contain an
option to receive cash payment in lieu of the annuity;
( c) sum deducted from salary payable by or on behalf of the Government
to any individual for securing deferred annuity or making provision for
his spouse or children, to the extent of 20% of salary;
52. Inserted by the Finance Act, 2026, w.e.f. 1-4-2026.
(d) contribution by an individual to any provident fund to which the
Provident Funds Act, 1925 (19 of 1925) applies;
( e) contribution to an account with any provident fund, set up and notified
by the Central Government, in the name of,––
( i) in the case of an individual, such individual, spouse of the individual
and any child of the individual;
( ii) in the case of a Hindu undivided family, any member thereof;
( f) contribution by an employee to a recognised provident fund;
( g) contribution by an employee to an approved superannuation fund;
( h) subscription to any security or deposit scheme notified by the Central
Government in the name of an individual or any girl child of that indi -
vidual, or any girl child for whom such person is the legal guardian, if
the scheme so specifies;
( i) subscription to savings certificate as mentioned in section 3( k) of the
Government Savings Banks Act, 1873 (5 of 1873), as may be notified by
the Central Government;
( j) contribution for participation in Unit-linked Insurance Plan, 1971
specified in Schedule II of the Unit Trust of India (Transfer of
Undertaking and Repeal) Act, 2002 (58 of 2002),––
( i) in the case of an individual, in the name of such individual, spouse
of the individual and any child of the individual;
( ii) in the case of a Hindu undivided family, in the name of any member
thereof;
( k) contribution for participation in unit-linked insurance plan of Life
Insurance Corporation Mutual Fund, referred to in Schedule VII (Table:
Sl. No. 20 or 21), as may be notified by the Central Government,—
( i) in the case of an individual, in the name of such individual, spouse
of the individual and any child of the individual;
( ii) in the case of a Hindu undivided family, in the name of any member
thereof;
( l) sum paid to effect or to keep in force a contract for annuity plan of the
Life Insurance Corporation or any other insurer notified by the Central
Government;
( m) subscription to any units of any Mutual Fund referred to in serial number
20 or 21 of the Table in Schedule VII or from the Administrator or the
specified company under any plan formulated in accordance with such
scheme notified by the Central Government;
( n) contribution by an individual to any pension fund set up by––
( i) any Mutual Fund referred to in Schedule VII (Table: Sl. No. 20 or
21); or
( ii) the Administrator; or
( iii) the specified company,
as may be notified by the Central Government;
( o) subscription to a deposit scheme or contribution to a pension fund, set
up by the National Housing Bank established under section 3 of the
National Housing Bank Act, 1987 (53 of 1987), as may be notified by the
Central Government;
( p) subscription to any deposit schemes of––
( i) a public sector company engaged in providing long-term finance
for construction or purchase of houses in India for residential
purposes; or
( ii) an authority constituted in India by any law, 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 may be notified by the Central Government;
( q) tuition fees (excluding any development fees or donation or payment of
similar nature) paid by an individual to any University, college, school
or other educational institution situated in India (at the time of admis-
sion or thereafter), for full time education of any two children of such
individual;
( r) payment made for purchase or construction of a residential house prop-
erty 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
own residence of the assessee, have been chargeable to tax under that
head), subject to satisfaction of conditions laid down in paragraph 3;
( s) term deposit for a fixed period of not less than five years with a sche-
duled bank, and which is as per such scheme framed and notified by the
Central Government;
( t) subscription to bonds issued by the National Bank for Agriculture and
Rural Development, as may be notified by the Central Government;
( u) deposit in an account under the Senior Citizen Savings Scheme Rules,
2004;
( v) five years term deposit in an account under the Post Office Time Deposit
Rules, 1981;
( w) contribution by an employee of the Central Government to an additional
account referred to in section 20(3) of the Pension Fund Regulatory and
Development Authority Act, 2013 (23 of 2013) of the pension scheme
notified by the Central Government, as referred to in section 124—
( a) for a fixed period of not less than three years; and
( b) which is as per the scheme as may be notified by the Central
Government for the purposes of this clause;
( x) contribution made from income chargeable to tax to effect or keep in
force a contract for any annuity plan of Life Insurance Corporation of
India or any other insurer for receiving pension from the fund referred
to in Schedule VII (Table: Sl. No. 3);
( y) contribution made by an individual to a pension scheme notified by the
Central Government, to the extent of––
( i) 10% of salary, including dearness allowance, if the terms of employ-
ment so provide, but excluding all other allowances and perqui -
sites, during the tax year in the case of an employee of the Central
Government or any other employer; or
( ii) 20% of gross total income during the tax year in the case of any
other individual;
( z) subscription to––
( i) 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 subscription to any eligible issue of capital by any
public financial institution in the prescribed form;
( ii) any units of any mutual fund referred to in Schedule VII (Table: Sl.
No. 20 or 21) and approved by the Board on an application made
by such mutual fund in the prescribed form and if the amount of
subscription to such units is subscribed only in the eligible issue
of capital of any company.
Payment on insurance policy.
2. (1) The deductions 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,––
( a) as is up to 20% of the actual capital sum assured, in respect of a policy
issued on or before the 31st March, 2012;
( b) as is up to 10% of the actual capital sum assured, in respect of a policy
issued on or after the 1st April, 2012;
( c) as is up to 15% of the actual capital sum assured, if the policy is issued
on or after the 1st April, 2013 and where such policy covers the life of,––
( i) a person with a disability or severe disability as referred to in section
154; or
( ii) a person suffering from a disease or ailment specified in the rules
made under section 128.
(2) In this paragraph, “actual capital sum assured” 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—
( a) the value of any premiums agreed to be returned; or
( b) any benefit by way of bonus or otherwise over and above the sum actu-
ally assured, which is to be or may be received under the policy by any
person.
Payments made for purchase or construction of residential house property.
3. The deduction in respect of amount spent for purchase or construction of a
residential house property as provided in paragraph 1(r) shall––
( a) include payments that are made towards or by way of—
( i) 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
( ii) 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
( iii) repayment of the amount borrowed by the assessee from—
( A) the Central Government or any State Government; or
( B) any bank, including a co-operative bank; or
( C) the Life Insurance Corporation; or
( D) the National Housing Bank; or
( E) 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
section 32(e); or
( F) any company in which the public are substantially interested
or any co-operative society, where such company or co-op -
erative society is engaged in the business of financing the
construction of houses; or
( G) the employer where such employer is an authority or a board
or a corporation or any other body established or constituted
under a Central Act or State Act; or
( H) the employer of the assessee where such employer is a public
company or a public sector company or a University estab -
lished by law or a college affiliated to such University or a
local authority or a co-operative society; or
( iv) stamp duty, registration fee and other expenses for the purpose of
transfer of such house property to the assessee;
( b) not include any payment towards or by way of—
( i) the admission fee, cost of share and initial deposit which a share-
holder of a company or a member of a co-operative society has to
pay for becoming such shareholder or member; or
( ii) 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 au -
thority competent to issue it, 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
( iii) any expenditure in respect of which deduction is allowable under
section 22.
Disallowance of and taxation of deduction already allowed.
4. The deductions in the nature of payments specified in column B of the Table below
shall not be allowable in the tax year in which the conditions specified in column C
of the said Table are fulfilled, and the aggregate amount of the deductions allowed
thus far in the preceding tax year or tax years shall be deemed to be the income of
the assessee and liable to tax in such tax year:
TABLE
Sl.
No.
Nature of payment Conditions for disallowance of the deduction
in respect of payment provided in column B
A B C
1. Premium paid for a life in -
surance policy.
Where the assessee terminates his contract of
insurance, 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 com-
mencement of insurance; or
( b) in any other case, before premiums have
been paid for two years.
2. ( a) Contribution for par -
ticipation in the Unit-
Where the assessee terminates his participa-
tion in such plan, by notice to that effect or
Linked Insurance Plan,
1971;
( b) contribution for par -
ticipation in the unit-
linked insurance plan
of Life Insurance Cor-
poration Mutual Fund.
where he ceases to participate by reason of
failure to pay any contribution, by not reviv-
ing his participation, before contributions in
respect of such participation have been paid
for five years.
3. Certain payments made for
purchase or construction of
residential house property.
Where the assessee––
( a) transfers the house property before the
expiry of five years from the end of the
tax year in which possession of such
property is obtained by him; or
( b) receives back, whether by way of refund
or otherwise, any sum specified in that
clause.
4. Certain payments for sub -
scription to any equity shares
or debentures forming part
of any eligible issue of capital
( a) Where the assessee sells or otherwise
transfers to any person at any time
within a period of three years from the
date of their acquisition; and
Sl.
No.
Nature of payment Conditions for disallowance of the deduction
in respect of payment provided in column B
A B C
by a public company or by.
any public financial institu-
tion and approved by Board
( b) such shares or debentures shall be treat-
ed as having acquired by the person on
the date on which his name is entered
in relation to those shares or debentures
in the register of members or of deben-
ture-holders, as the case may be, of the
public company.
Taxation of receipts where deduction already allowed
5. Where deductions in the nature of payments specified in column B of the Table
below have been allowed, and the conditions specified in column C of the said Table
are fulfilled in any tax year, the amounts received shall be taxed in such tax year in
the manner as provided in column D of the said Table:
TABLE
Sl.
No.
Nature of payment Condition for
taxation
Manner and amount of
taxation in the tax year in
which condition in column C
is fulfilled
A B C D
1. ( a) Deposit in an ac-
count under the
Senior Citizen
Savings Scheme
Rules, 2004;
( b) five year term
deposit in an ac -
count under the
Post Office Time
Deposit Rules,
1981.
If any amount,
including interest
accrued, in respect
of the account pro-
vided in column
B, is withdrawn
by the assessee,
before the expiry
of the period of
five years from the
date of its deposit.
( a) The amount so withdrawn
shall be deemed to be the
income of the assessee of
the tax year in which the
amount is withdrawn and
shall be liable to tax in the
said year;
( b) the amount liable to tax, as
referred in clause (a), shall
not include the following
amounts:—
( i) any amount of in -
terest, which has
been included in the
total income of the
assessee of the tax
year or years preced-
ing such tax year;
and (ii) a n y
amount received by
the nominee or legal
heir of the asses -
see, on the death of
Sl.
No.
Nature of payment Condition for
taxation
Manner and amount of
taxation in the tax year in
which condition in column C
is fulfilled
A B C D
such assessee, other than
interest, if any, accrued
thereon, which was not in-
cluded in the total income
of the assessee for the tax
year or years preceding
such tax year.
2. Contribution to effect
or keep in force a con-
tract for any annuity
plan of Life Insurance
Corporation of India or
any other insurer for
receiving pension from
the fund referred to in
Schedule VII (Table:
Sl. No. 3).
Where any amount
standing to the
credit of the asses-
see in the pension
fund, in respect
of which a de -
duction has been
allowed, together
with the interest
or bonus accrued
or credited to the
assessee account,
if any, is received
by the assessee
or his nominee,—
( a) on account
of the sur -
render of the
annuity plan
whether in
whole or in
part, in any
tax year; or
( b) as pens-
ion received
from the an-
nuity plan.
An amount equal to the whole
of the amount referred to in
column C ( a) or ( b) shall be
deemed to be the income of
the assessee or his nominee,
in the tax year in which such
withdrawal is made or, pension
is received, and shall be liable
to tax in the said year.
3. Contribution by an
individual to a pension
scheme notified by the
Central Government.
Where any amount
standing to the
credit of the asses-
see in the pension
scheme, in respect
The whole of the amount re -
ferred to in column C ( a) or
(b) shall be deemed to be the
income of the assessee or his
nominee, in the tax year in
Sl.
No.
Nature of payment Condition for
taxation
Manner and amount of
taxation in the tax year in
which condition in column C
is fulfilled
A B C D
of which a de -
duction has been
allowed, together
with the amount
accrued thereon,
if any, is received
by the assessee or
his nominee, in
whole or in part,
in any tax year, and
if such amount is
not used for pur -
chasing an annuity
plan in the same
year—
( a) on account
of closure
or his opt -
ing out of
the pension
scheme (ex -
cept when
received by
the nomi -
nee on the
death of the
assessee); or
( b) as pens-
ion received
from the an-
nuity plan
purchased
or taken on
such closure
or opting
out.
which such amount is received,
and shall be liable to tax in the
said year.
Interpretation.
6. For the purposes of this Schedule,––
( 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) “contribution” to any fund shall not include any sums in repayment of
loan;
( c) “insurance” shall include,—
( i) 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 irrespective 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;
( ii) 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;
(d) “Life Insurance Corporation” means the Life Insurance Corporation of
India established under the Life Insurance Corporation Act, 1956 (31 of
1956);
( e) “public company” shall have the same meaning as assigned to it in section
2(71) of the Companies Act, 2013 (18 of 2013);
( f) “security” means a Government security as defined in section 2(f) of the
Government Securities Act, 2006 (38 of 2006);
( g) “specified company” means a company as referred to in section 2(h) of
the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002
(58 of 2002);
( h) “transfer” shall be deemed to include also the transactions referred to in
section 269UA(f) of the Income-tax Act, 1961 (43 of 1961);
( 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 are utilised wholly and exclusively for the
purposes of any business referred to in section 80-IA(4) of the Income-tax
Act, 1961 (43 of 1961);
( j) “public financial institution” shall have the same meaning as assigned
to it in section 2(72) of the Companies Act, 2013 (18 of 2013).