Life insurance related

This query is : Resolved

BHUVANESHWER PRASAD (Querist)
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19 April 2012 Dear Team,
I was going through one Financial Planning Journal and one query is answer there which i have some doubt.. Please clarify.

"his client took an insurance policy from LIC during 2009-10 with Rs. 8,00,000 Sum Assured and Rs. 1,00,000 Premium pa. He has been getting 80C deduction and he was eligible to take the complete advantage of the premium paid i.e. Rs. 1,00,000, but now his concern which is post Finance Bill 2012, he will not be able to take the complete deduction..."

Clarification by Expert : Claiming deduction of Rs. 1,00,000, till AY 2012-13 is fine as 20% of Rs. 8,00,000 works out to Rs. 1,60,000. However, as per the Finance Bill 2012, for AY 2013-14, the client may only claim a maximum amount of Rs. 80,000 (i.e. 10% of Rs. 8,00,000) in respect to insurance premium.

Thanks in Advance.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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19 April 2012 The amendments will apply for the new policies taken after 1.04.2012 and not on the old policies.

CA Kishore Tallam

CA Kishore Tallam (Expert)
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20 April 2012 Agree with expert. This will apply to insurance policies issued on or after 1st April 2012. However in ur example, if the premium amount exceeds 10% of the sum assured, then the total amount will not be eligilble for deduction but not upto 10%.

BHUVANESHWER PRASAD

BHUVANESHWER PRASAD (Querist)
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20 April 2012 Thank to you both experts for your clarification.

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