Section 80DD needs amendment to allow relief if maturity sum given before death of insured person: Supreme Court


Section 80DD needs amendment to allow relief if maturity sum given before death of insured person: Supreme Court


a) Section 80DD of the Income-tax Act, 1961 allows deduction to Individ uals or HUFs for insurance or deposits made in specified schemes for maintenance of a disabled dependant.  

b) One of the conditions to avail of deduction is that disabled dependant would get annuity or lumpsum payment only in the event of death of t he individual or the death of the member of the HUF, in whose name s ubscription to the scheme has been made.
c) Jeevan Aadhar Plan of LIC, following the provisions of Sec. 80DD, does not give any annuity amount to disabled dependant before the death of the insured person.  

d) Thus, petitioner had filed a PIL before the Supreme Court with plea of suitable amendment to Section 80DD so that benefit of such policies s hould not be deferred till the death of the assessee/life assured and it should be allowed to be utilised for the benefit of the disabled person even during the lifetime of the assessee. The Supreme Court held in
favour of assessee as under:
1) The purpose of provision of section 80DD is to secure the future of the persons suffering from disability, namely, after the death of the parent/ guardian and condition incorporated in insurance policy to the effect t hat the amount shall not be given to the handicapped persons during th e lifetime of the parent/guardian/life assured is in conformity with Sect ion 80DD(2)(b).  

2) The said condition is a legislative mandate and there can be no challe nge to this provision. However, the prayer was that Section 80DD be su itably amended.  

3) Supreme Court couldn’t give any direction to the Parliament to amen d or make a statutory provision in a specified manner. It could only det ermine as to whether such a provision passes the muster of the Constit utional Scheme?.  

4) Petitioner was justified in pointing out that there could be harsh case s where handicapped persons may need the maturity amount even durin g the lifetime of their parents/guardians.  

5) Therefore, the writ petition was disposed of by urging upon Govern ment to have a relook into this provision and explore the possibility of making suitable amendments.