Section 2 - Amendment of section 36 - Income Tax (Amendment) Act, 1986

2. Amendment of section 36. In section 36 of the Income-tax Act, 1961 (43 of 1961) (hereinafter referred to as the principal Act), in sub-section (1), (a) after clause (ia), the following clause shall be inserted, namely: (ib) the amount of any premium paid by cheque by the assessee as an employer to effect or to keep in force an insurance the health of his employees under a scheme framed in this behalf by 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; ; (b) in clause (viia), for the portion beginning with the words in respect of any provision and ending with the words whichever is higher. , the following shall be substituted, namely: in respect of any provision for bad and doubtful debts made by - (a) a scheduled bank [not being a bank approved by the Central Government for the purposes of clause (viiia) or a bank incorporated by or under the laws of a country outside India] or a non-scheduled bank, an amount not exceeding five per cent. of the total income (computed before making any deduction under this clause and Chapter VIA) and an amount not exceeding two per cent. of the aggregate average advances made by the rural branches of such bank computed in the prescribed manner; (b) a bank, being a bank incorporated by or under the laws of a country outside India, an amount not exceeding five per cent. of the total income (computed before making any deduction under this clause and Chapter VIA). .