Deduction U/s 80C

Tax planning 892 views 8 replies

Aaditya Lunked

Article Assistant

62 Points Joined April 2009

Dear Sir / Colleagues,

Here I am facing problem in resolving the below mentioned matter.

One of our client have not paid his LIC premium for last 3 years which was below the standard limit of 20% for individual year and now he is willing to start the policy again in order to take benefit of provision of section 80C, but the question arises whether the premium for last 3 years will be allowed as deduction or not because all together premium exceeds the limit of 20%.

Members,

Please comment upon the Topic.

Regards,

Aaditya Lunked

Replies (8)

Y. S. Ghodvaidya

Sr. Accounts Executive

67 Points Joined July 2009

Hi Aditya

Your Client for get the deduction only for the Current financial year

Ashish M

Chartered Accountant

2731 Points Joined January 2008

It is not necessary for the payment to relate to the current financial. It may relate to any of the previous financial years.

The thing is just that it must not be more than 20 % of the total sum assured and the payment should be from the currenty financial year income.

Vicky

CA LCS MCOM

136 Points Joined January 2010

premium paid to the extent of 20% of sum assured will be allowed as deduction even if the same relates to previous year/s

Vicky

CA LCS MCOM

136 Points Joined January 2010

also as per sec 10(10)D the amt received at the time of maturity will not be exempt if premium paid for any of the years during the term of policy exceeds 20% of the sum assured

CA Final

CA Final Student

856 Points Joined July 2009

Only 20% allowed.................

angli kaur

student

24 Points Joined August 2010

deduction u/s 80C deduction can be claimed on the payment basis,moreover max deduction that can be claimed in the case of insurance is

a)20% of sum assured or

b)the amount paid

moreover the deduction u/s 80C,80CCC &80CCD should not exceed Rs.100000

angli kaur

student

24 Points Joined August 2010

since deduction u/s 80C is claimed on payment basis,it dosen't matter for which year the payment has been made,what concerns is in which year payment has been made.