Who can claim deduction 80c
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
09 June 2013
Please Answer the following cases :
A. Mr. X Pays the premium of Mrs. X, Can Mrs. X Take the Deduction ?
B. Mr. Y pay the premium of his son. can Son take Deduction. Does answer Changes if son is dependable or not.
A. Mr. X Pays the premium of Mrs. X, Can Mrs. X Take the Deduction ?
B. Mr. Y pay the premium of his son. can Son take Deduction. Does answer Changes if son is dependable or not.
09 June 2013
Deduction u/s.80C can be claimed who is actually made the payment from their taxable income. so in 1st case only Mr. X can take the deduction
2nd case father paid son`s premium, so father can take deduction u/s.80C
Whether son is dependent or not, father is eligible to claim deduction for son`s premium paid by him
2nd case father paid son`s premium, so father can take deduction u/s.80C
Whether son is dependent or not, father is eligible to claim deduction for son`s premium paid by him
09 June 2013
In my opinion
A)Mrs.x can take deduction provided premium receipt is in her name
B)Son can take deduction provided premium is in the name of son.
Actually i have not found/not aware that any condition in 80C that premium payment has to be done from the assesse income.
Even the said condition is available in section we can convince the department by saying those premium payments by Mr.X and Mr.Y are loan taken by Mrs.X and Son respectively.
Thanks & regards
Ganesh babu K
A)Mrs.x can take deduction provided premium receipt is in her name
B)Son can take deduction provided premium is in the name of son.
Actually i have not found/not aware that any condition in 80C that premium payment has to be done from the assesse income.
Even the said condition is available in section we can convince the department by saying those premium payments by Mr.X and Mr.Y are loan taken by Mrs.X and Son respectively.
Thanks & regards
Ganesh babu K
09 June 2013
@ Ganesh Babu
Of course section 80C has the option to claim the premium paid on behalf of spouse & children, mutual understanding & receipt in the name of the assessee can be claimed
But the actual purpose & objective of the section 80C or any other deductions under chapter VI-A, for claiming deduction, assessee should have the taxable income & the amount of deduction need to be paid by out of the taxable income
Relevant extracts from the section.
(2) The sums referred to in sub-section (1) shall be any sums paid or deposited in the previous year by the assessee—
(i) to effect or to keep in force an insurance on the life of persons specified in sub-section (4);
(ii) to effect or to keep in force a contract for a deferred annuity, not being an annuity plan referred to in clause (xii), on the life of persons specified in sub-section (4):
with the above extract, section clearly stated assessee paid or deposited
so, still I feel my view is correct as per law.
Of course section 80C has the option to claim the premium paid on behalf of spouse & children, mutual understanding & receipt in the name of the assessee can be claimed
But the actual purpose & objective of the section 80C or any other deductions under chapter VI-A, for claiming deduction, assessee should have the taxable income & the amount of deduction need to be paid by out of the taxable income
Relevant extracts from the section.
(2) The sums referred to in sub-section (1) shall be any sums paid or deposited in the previous year by the assessee—
(i) to effect or to keep in force an insurance on the life of persons specified in sub-section (4);
(ii) to effect or to keep in force a contract for a deferred annuity, not being an annuity plan referred to in clause (xii), on the life of persons specified in sub-section (4):
with the above extract, section clearly stated assessee paid or deposited
so, still I feel my view is correct as per law.
Message likes :
1 times
09 June 2013
@ cma ramakrishnan
Dear sir,
Please clarify my doubts on this issue.
Please let me know is it possible or not possible to claim 80C deduction as i said above .
we generally claim 80C in itr and for employer we provide premium receipts so..
is it not a proper reason that Mr.X and Mr.Y paid premium amounts to assesse as a loan..
my one more question is who will ask us that from whose income it is paid out where premium receipt is there in name of assesse if it is in bank account statement is it not possible to escape by saying it as loan given
I may be wrong ,..Please clarify..
Dear sir,
Please clarify my doubts on this issue.
Please let me know is it possible or not possible to claim 80C deduction as i said above .
we generally claim 80C in itr and for employer we provide premium receipts so..
is it not a proper reason that Mr.X and Mr.Y paid premium amounts to assesse as a loan..
my one more question is who will ask us that from whose income it is paid out where premium receipt is there in name of assesse if it is in bank account statement is it not possible to escape by saying it as loan given
I may be wrong ,..Please clarify..
09 June 2013
Ramesh Ji
The erstwhile section 80C has a condition that investment should necessarily be out of'taxable income'.
But the present section 80C which has become effective w.e.f. 1st April, 2006 do not have such a condition ,meaning thereby the source of investment can be other than from current year's income.
The erstwhile section 80C has a condition that investment should necessarily be out of'taxable income'.
But the present section 80C which has become effective w.e.f. 1st April, 2006 do not have such a condition ,meaning thereby the source of investment can be other than from current year's income.
09 June 2013
@ Chackrapani Warrier sir
Thanks for the updation.
@Ganeshbabu ji
My 2nd reply itself i have told option is there to claim based on mutual understanding and name of the receipt.
Thanks for the updation.
@Ganeshbabu ji
My 2nd reply itself i have told option is there to claim based on mutual understanding and name of the receipt.
Querist : Anonymous
Querist :
Anonymous
(Querist)
09 June 2013
So Finally
Is the Conclusion is this.
That anyone can claim deduction but subject to fall in the Term Family ?
Is the Conclusion is this.
That anyone can claim deduction but subject to fall in the Term Family ?
03 August 2025
Great discussion! To clarify and summarize the key points about who can claim deduction under Section 80C for life insurance premium paid on someone else’s behalf:
1. Who can claim deduction for premium paid?
Section 80C allows deduction to the assessee who actually pays or deposits the premium.
The premium must be paid on the life of the specified persons (self, spouse, children, or any person for whom the assessee is a legal guardian).
2. If Mr. X pays premium on Mrs. X’s life:
The premium is paid by Mr. X.
Deduction can be claimed by Mr. X (the person who actually paid).
The receipt should ideally be in Mr. X’s name or at least the premium paid by Mr. X is supported by proper documentation.
Mrs. X cannot claim deduction because she did not pay the premium from her income.
3. If Mr. Y pays premium on son’s life:
Same logic applies: Mr. Y can claim deduction as he paid.
Whether the son is dependent or not does not change the fact that deduction is claimed by the person who pays the premium.
4. Can the person on whose life premium is paid claim deduction?
Generally, no, unless that person actually pays the premium.
Some professionals suggest that if the payment is treated as a loan from the premium payer to the person insured, and then that insured pays, deduction might be claimed. But this is a grey area and can be challenged by tax authorities.
5. Source of payment (from whose income):
The current Section 80C (post 1st April 2006) does not require that the payment must be from the assessee’s taxable income of that year.
The payment can be from any source, including loans or gift, as long as the premium is paid by the assessee and the payment is supported by receipts in the assessee’s name.
The department generally does not probe deeply into the source unless there is suspicion of tax evasion.
6. Practical advice:
The safest approach is to claim deduction by the person who actually pays the premium and whose name is on the premium receipt.
If you want Mrs. X or son to claim deduction, the premium should be paid by them or at least receipts must be in their name.
Final summary:
Case Deduction Allowed To
Mr. X pays premium on Mrs. X Mr. X (payer)
Mr. Y pays premium on son Mr. Y (payer), irrespective of son’s dependency
Premium receipt in payer’s name Deduction allowed to payer
Premium receipt in insured’s name Deduction can be claimed by insured if they paid
1. Who can claim deduction for premium paid?
Section 80C allows deduction to the assessee who actually pays or deposits the premium.
The premium must be paid on the life of the specified persons (self, spouse, children, or any person for whom the assessee is a legal guardian).
2. If Mr. X pays premium on Mrs. X’s life:
The premium is paid by Mr. X.
Deduction can be claimed by Mr. X (the person who actually paid).
The receipt should ideally be in Mr. X’s name or at least the premium paid by Mr. X is supported by proper documentation.
Mrs. X cannot claim deduction because she did not pay the premium from her income.
3. If Mr. Y pays premium on son’s life:
Same logic applies: Mr. Y can claim deduction as he paid.
Whether the son is dependent or not does not change the fact that deduction is claimed by the person who pays the premium.
4. Can the person on whose life premium is paid claim deduction?
Generally, no, unless that person actually pays the premium.
Some professionals suggest that if the payment is treated as a loan from the premium payer to the person insured, and then that insured pays, deduction might be claimed. But this is a grey area and can be challenged by tax authorities.
5. Source of payment (from whose income):
The current Section 80C (post 1st April 2006) does not require that the payment must be from the assessee’s taxable income of that year.
The payment can be from any source, including loans or gift, as long as the premium is paid by the assessee and the payment is supported by receipts in the assessee’s name.
The department generally does not probe deeply into the source unless there is suspicion of tax evasion.
6. Practical advice:
The safest approach is to claim deduction by the person who actually pays the premium and whose name is on the premium receipt.
If you want Mrs. X or son to claim deduction, the premium should be paid by them or at least receipts must be in their name.
Final summary:
Case Deduction Allowed To
Mr. X pays premium on Mrs. X Mr. X (payer)
Mr. Y pays premium on son Mr. Y (payer), irrespective of son’s dependency
Premium receipt in payer’s name Deduction allowed to payer
Premium receipt in insured’s name Deduction can be claimed by insured if they paid
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