80c deduction on life insurance

Tax planning 406 views 4 replies

Jyothis

Article

1127 Points Joined December 2014

1) Is all life inusrance payment eligible for 80C deduction,when should such payments be made.

Say for claiming deduction under 80C for FY 15-16,is it necessary to pay life insurance premium before March,31,2016.

2) Is there any specific requirement of Service provider,can we claim deduction on life insurance service provided by pvt party.

3)Can we claim entire inusrance premium as deduction say -Rs.57,250 in which Rs.7250/- being service tax portion.

4) Is it mandatory claim deduction only on life insurance invoice/recepit where it is specifically stated as eligible for 80C deduction.

5)How can we check 10% condition of sum assured where there is "Sum assured","Min death benefit"

Replies (4)

Aanand Jha

Employed

792 Points Joined May 2010

It is not necessary to have the insurance policy from Life Insurance Corporation (LIC) – even insurance bought from private players can be considered here

Only life insurance premia paid or deposited during the year are allowable as deduction under Section 80C. i.e actual payment by way of cheque.

Yeas we can claim deduction of service tax on premium as a part of premium

Ajit Hegde

CA - Final

1367 Points Joined September 2009

Service tax on premium cannot be claimed as a deduction

Sathish M

Management Accountant

40581 Points Joined June 2010

There is diverse view on whether to include service tax paid on insurance premium. One view is the provision mentions �ANY amount paid to keep in force a life insurance policy qualifies for a tax deduction under Sec. 80C�. So you can claim the Premium+Service Tax+Cess to avail the claim under Sec.80C. The other view is to consider only the amount which is premium component can be claimed as deduction. Until the department issues a Notification on this matter the confusion shall prevail.

Ajit Hegde

CA - Final

1367 Points Joined September 2009

The reason behind my opinion was that service tax is a cost for final consumer. If we claim ST component on that, it is like taking credit of service tax which is not eligible ! that too with a different department !