Sec 80D Exemption on Insurance for Loan

This query is : Resolved

Rajarajan Gurunath (Querist)
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11 May 2011 Dear Experts,

I have taken a personal loan from a bank. Bank provides insurance cover for the the loan amount under group insurance policy with tie up to an insurance company.Also the bank informed my I get exemption under sec 80D for the insurance amount.

I have recd the insurance certificate/receipt from the insuance company and it is stated exemption as per tax laws.

Now it is confusing whether the exemption is allowed u/s 80C or 80D

Amol Gopal Kabra (CA,CS,DISA)

Amol Gopal Kabra (CA,CS,DISA) (Expert)
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11 May 2011 Neither 80C is allowed nor 80D. If the insurance premium paid is towards securing the loan amount, there is no kind of deduction available. But if the bank has sold to you a health insurance polity alongwith the personal loan, or a life insurance policy then you may get deduction u/s 80D or 80C respectively.

Rajarajan Gurunath

Rajarajan Gurunath (Querist)
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11 May 2011 it is a cover against outstanding loan amount. In case of death of policy holder or permanent disability, the loan amount will be waived off.

Amol Gopal Kabra (CA,CS,DISA)

Amol Gopal Kabra (CA,CS,DISA) (Expert)
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11 May 2011 Then there is no deduction u/s 80C or 80D.

Rajarajan Gurunath

Rajarajan Gurunath (Querist)
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11 May 2011 The Insurance certificate mentions exempted in Tax, but does not mention specific section.

I spoke to the customer care of the insurance company, they also confirmed that is exempted u/s 80D

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