An individual assessee purchased a (1year) health policy covered under section 80D and paid the amount via credit card on EMI basis starting from Nov 2018 ending on Oct 2019?
Now whether whole amount is allowed in FY ending on 31/03/2019.
Or
Partly allowed in F.Y 2019 and partly in 2020.
Or whole amount is allowed in F.Y. 2020 when full payment is done.
Kindly advice as per law /Industrial practice .
Remember :-
As per 80D "appropriate fraction" concept is there which is only relevant for policies for more than 1 year which is not our case.
Our policy is only for 1 year but it stipulated to next year.
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80D health policy actual payment issue
Replies (3)
As the deduction is for the premium paid, any premium paid in the FY can only be claimed as deduction.
1. The word specified u/s 80D is the "whole of the amount paid". So it should have actually paid in order to claim deduction u/s 80D. Deductions u/s Chapter VI-A's are allowed only on actual payment basis.
2. What if the remaining EMI's were not paid after claiming it as a deduction. For the same reason deduction, u/s 80D's were allowed only on actual amount paid and not on a provision basis.
3. In your case, only the amount paid during the FY 2018-19 will be allowed as deduction u/s 80D and not the whole premium amount where part of the amount is yet to be paid.
Please correct me if the above interpretation has an alternative view.
The above view is correct. The amt paid during the previous year can be claimed as a deduction in the AY.
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