Dear All,
Logically Sec.80C allowed on Payt Basis,
But If we had paid Premium which was due on 30th march 2011 (but due to 1month grace period is allowed by Insurance Co., we paid same on 30th Apr.
.If we paid Insurance Premium for 30th April 2011. Then Can we claim Deduction in AY11-12 Return or Not...
Sly if in above case if Policy has been elapsed on 10th Jan but we revive the same policy on 30th Apr By giving additional charges.
Pls reply to both cases.
Thanks
well mayank, you have rightly mentioned that 80C is allowed on actual payment basis. due date of payment is not at all important. it is the actual payment of premium that entitle u for a deduction u/s 80 C.
thus premium paid in the relevant previous year will be allowed as deduction irrespective of its due date.
not allowed in 2011-12. because policy term doesn't matter, Year of payment is relevant.
agree with Shashi Tax provisions are relevent only payment deduction allowed
The grace period of insurance company cannot override the provisions of the income tax act.
Please pay your insurance premium by 31st march to claim it as deduction u/s80C for that particular financial year !
Rebates in section 80C are applicable in payment basis only.
Premium due date is not relevant. If u paid advance prepium or late premium, rebate is allow only in the year when u make payment.
Dear Mayank,
I agree with the answers given by others that 80C is allowable on payment basis. But remember that, when you claim the deduction next year for the premium paid on 30th April, dont take additional charges into account
@ Mayank
Agreed with others. Allowed on Actualy payment basis in both the situations
CAclubindia
