491. Special Frontier Force Group Insurance Scheme – Allowability of deduction of contributions made thereto under clause (a)(i) of sub-section (2)

1. The Cabinet Secretariat have introduced with effect from January 1, 1980 an insurance Scheme called the “Special Frontier Force Group Insurance Scheme” for the welfare of employees.  The objective of the Scheme is to provide, at a low cost and on a wholly contributory and self-financing basis, the benefits of an insurance cover for the families of the employees in the event of their death while in service and a lump sum payment to the employees on their retirement, discharge, etc., from service.

2. A question has been raised whether the contributions made by the officers and staff towards the Special Frontier Force Group Insurance Scheme would entitle the contributors to relief under section 80C(2)(a )(i) of the Income-tax Act.  It has been decided that the amount contributed by the employees of this organisation to the Special Frontier Force Group Insurance Scheme will be treated as an insurance premium and will qualify for relief subject to the condition imposed in section 80C(4).

Circular : No. 404 [F.  No. 178/50/82-IT (A-I)], dated 15-1-1985

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