CBDT circular 9 December 1988
Circular No. 527
509. Notified plans of LIC
What this is
Circular No. 527 was issued by the Central Board of Direct Taxes on 9 December 1988. Its subject is 509. Notified plans of LIC.
This is a clarification. The Board is stating how it reads a provision. That reading binds the department; it does not bind a court, and where the section says otherwise the section wins.
What it does
Notifies two Life Insurance Corporation plans for the section 80CCA deduction. It clarifies that the Central Government has specified the 'Jeevan Dhara' and 'Jeevan Akshay' plans of the Life Insurance Corporation of India for the purposes of section 80CCA(1)(ii). Deductions under paragraph 4(ix)(2) of Circular No. 517 dated 16 June 1988 are to be allowed accordingly. The limits and conditions in that paragraph are unchanged.
Why it was issued
To carry forward the earlier salary circular's treatment of section 80CCA by naming the annuity plans the Central Government had specified under clause (ii) of that sub-section.
Who it reaches
- Salaried assessees who put money into Jeevan Dhara or Jeevan Akshay
- Employers computing tax deductible from salaries under the earlier circular
- Assessing Officers allowing deduction under section 80CCA(1)(ii)
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.80CCA | no counterpart recorded |
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.
509. Notified plans of LIC
I am directed to refer to para 4(ix)(2) of this Ministry’s Circular No. 517, dated 16-6-1988 on the above subject and to clarify that the Central Government have specified ‘Jeevan Dhara’ and ‘Jeevan Akshay’ plans of the Life Insurance Corporation of India for the purpose of clause (ii ) of sub-section (1) of section 80CCA of the Income-tax Act. This may be noted for allowing the deductions mentioned in the aforesaid para. The limits and conditions mentioned in para 4(ix)(2) of the circular remain unchanged.
Circular : No. 527, dated 9-12-1988.
What to watch
- Only the two named plans are covered; other annuity plans need their own specification.
- The limits and conditions are not in this circular at all — they are in paragraph 4(ix)(2) of Circular No. 517 dated 16 June 1988, which must be read with it.
- This is a short departmental letter clarifying an earlier circular rather than a standalone instruction, and it works on section 80CCA as it then stood.
- Section 80CCA carried its own consequences on withdrawal, which this circular does not address.
Where you meet it
In an employer's salary tax computation of that period, or where a deduction claimed on an annuity plan premium is questioned.
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.
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.