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Lip deduction when deposit dt & policy dt fall in diff fy's

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Querist : Anonymous

Querist : Anonymous (Querist)

16 August 2013 Dear Sir,
I have paid Rs.50000/- to an Insurance Company on 20th March, 2013 to take out a Life Insurance Policy so that i can claim deduction u/s. 80C in FY-2012-2013. They have provided me a deposit receipt stating therein that the amount is eligible for deduction u/s. 80C & the policy which they provided later on confirms that part too. But the problem is that the effective policy date as per policy documents is 24th April, 2013. I want to know whether i am eligible to take deduction u/s. 80C in FY-2012-13 i.e. in the year in which i have paid the initial deposit or in FY-2013-14 since the policy comes into existence in this Financial Year only?

CA PARTH SHAH

CA PARTH SHAH (Expert)
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15 December 2014 deduction u/s 80C is given to the assessee for payment of LIP is on cash basis i.e. deduction is given in the previous year in which the actual payment is made. Hence in your case you will get deduction in FY 2012-13 as you have paid premium in that year

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