Section 3 - Insertion of new section 80D - Income Tax (Amendment) Act, 1986

3. Insertion of new section 80D. After section 80CC of the principal Act, the following section shall be inserted, namely: 80D. Deduction in respect of medical insurance premia. (1) In computing the total income of an assessee, there shall be deducted, at the following rates, such sum as is specified in sub-section (2) and paid by him by cheque in the previous year out of his income chargeable to tax, namely: (i) in a case where such sum does not exceed in the aggregate three thousand rupees, the whole of such sum; and (ii) in any other case, three thousand rupees. (2) The sum referred to in sub-section (1) shall be the following, namely. (a) where the assessee is an individual, any sum paid to effect or to keep in force an insurance on the health of the assessee or on the health of the wife or husband, dependent parents or dependent children of the assessee; (b) where the assessee is a Hindu undivided family, any sum paid to effect or to keep in force an insurance on the health of any member of the family; (c) where the assessee is 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 Union territories of Dadra and Nagar Haveli and Goa, Daman and Diu, any sum paid to effect or to keep in force an insurance on the health of any member of such association or body or on the health of the dependent children of the members of such an association or body: Provided that such insurance shall be in accordance with 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 .