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TMI BlogExplanatory Notes on the provisions of the Income-tax (Amendment) Act, 1986X X X X Extracts X X X X X X X X Extracts X X X X ..... nd has been enacted as the Income-tax (Amendment) Act, 1986 (26 of 1986). OBJECTS OF THE ACT 2. The Income-tax Act (Amendment) Act, 1986 (hereinafter referred to as the "Amending Act") has amended the provisions of section 36 and 80HHB of the Income-tax Act, besides inserting a new section 80D of the Act. These amendments have been made primarily in pursuance of the announcement made in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its, for any premium on medical insurance policies taken by them with the General Insurance Corporation of India. 4.2 In pursuance of the above, the Amending Act has inserted a new clause (ib) in sub-section (1) of section 36 of the Income-tax Act, to allow a deduction to an employer in respect of premium paid by him by cheque for insurance on the health of his employees in accordance with a sch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any member of such family, association or body of individuals Modification in respect of deduction on provisions for bad and doubtful debts made by the banks 5.1 Under the existing provisions of clause (viia) of sub-section (1) of section 36 of the Income-tax Act inserted by the Finance Act, 1979, provision for bad and doubtful debts made by a scheduled or a non-scheduled Indian bank is al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imits the deduction to an amount not exceeding 2% of the aggregate average advances made by the rural branches of the banks concerned. It may be clarified that foreign banks do not have rural branches and hence this amendment will not be relevant in the case of the foreign banks. The other provisions secures that a further deduction shall be allowed in respect of the provision for bad and doubtful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tside India, a deduction from such profits or gains equal to 25% thereof is admissible. In order to encourage the activity of execution of projects outside India which is one of the sources of earning foreign exchange, section 80HHB has been amended to secure that the deduction will be admissible of an amount equal to 50% of such profits. S.C.Mishra Director (TPL) [F. No. 131/30/86-TPL] - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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