Circular No. 233

490. Contributions made under the Central Government Employees' Insurance Scheme - Whether eligible for relief under clause (a)(i) of sub-section (2)

What this is

Circular No. 233 was issued by the Central Board of Direct Taxes on 5 December 1977. Its subject is 490. Contributions made under the Central Government Employees' Insurance Scheme - Whether eligible for relief under clause (a)(i) of sub-section (2).

What it does

Confirms that a Central Government servant's monthly contributions under the Central Government Employees' Insurance Scheme qualify for relief under section 80C(2)(a)(i), subject to the qualifying amounts prescribed in section 80C(4). The scheme was formulated by the Ministry of Finance by Office Memorandum No. F. 60/14/77-IC dated 23 June 1977 and gives an insurance cover of Rs. 5,000 to all Central Government servants on regular establishments, including work-charged staff, other than railway servants and persons paid from Defence Services Estimates.

Why it was issued

A question had been raised whether the monthly contributions under the newly formulated scheme were eligible for relief under section 80C(2)(a)(i).

Who it reaches

Central Government servants on regular establishments contributing under the scheme
Drawing and disbursing officers computing tax on salary
Railway servants and Defence Services Estimates staff, who are outside the scheme

The provisions it speaks to

Left, the provision of the Income-tax Act, 1961 as the instrument itself names it. Right, the section of the Income-tax Act, 2025 that the department’s own concordance maps it to — which is where the same ground is now covered.

Under the 1961 Act	Now
s.80C	s.2, s.123

The instrument, as the Board published it

The words below are the department’s own, reproduced from its published text. Where the department’s copy carried a publisher’s notes after the instrument, those are not reproduced.

490. Contributions made under the Central Government Employees' Insurance Scheme - Whether eligible for relief under clause (a)(i) of sub-section (2)
1. Ministry of Finance vide its Office Memorandum No. F. 60/14/77-IC, dated 23-6-1977 has formulated a scheme known as the Central Government Insurance Scheme under which all Central Government servants on regular establishments (including work-charged staff) other than railway servants and persons paid from Defence Services Estimates have been provided with an insurance cover of Rs. 5,000.
2. A question has been raised whether the Government servant's monthly contributions under the scheme would be eligible for relief under section 80C(2)(a)( i). This question has been considered and it is clarified that the contributions to the Central Government Employees' Insurance Scheme will be eligible for relief under section 80C, subject to the qualifying amounts prescribed in section 80C(4).
Circular : No. 233 [F. No. 178/33/77-IT (A-I)], dated 5-12-1977.

What to watch

The relief is limited by the qualifying amounts in section 80C(4), so the whole contribution may not be allowed.
Railway servants and persons paid from Defence Services Estimates are outside the scheme and so outside this clarification.
Section 80C in the form construed here has since been replaced, so the deduction provision for the year in issue must be identified.

Where you meet it

When a Government employee's section 80C claim for insurance scheme contributions is questioned, or in computing tax deductible from salary.

On the same provision

Other instruments in this library that name the same provision of the 1961 Act. They are not necessarily still operative, and a later one may have replaced an earlier one without saying so.

Notification No. 134/2021 [F. No. 178/4/2021-ITA-I] / SO 5056(E) — 2 the Gazette of INDIA : Extraordinary [Part Ii—sec. 3(ii)] 6 December 2021
Notification No. 45/2020 [F. No.370142/26/2019-TPL] / SO 2232(E) — Ministry of Finance 7 July 2020
Notification No.91/2015 [F.No.178/21/2014-ITA.I] / SO 3313(E) — jftLVªh laö Mhö ,yö&33004@99 REGD. NO. D. L.-33004/99 8 December 2015
Circular No. 19/2015 — Circular No.- 19 /2015 27 November 2015
Circular 1/2015 — Explanatory notes to the provisions of the finance no.2 act 2014 21 January 2015
Notification No. 9/2015 [F.No.178/3/2015-ITA-I]/SO 210(E) — Section 80C of the Income-tax Act, 1961 - Deductions - in Respect of Insurance Premium, ETC. - Notified Plan under secti 21 January 2015

← Circular No. 234 · Circular No. 232 →

A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.