Deduction u/s. 80C

Tax queries 1195 views 2 replies

Rachit

Analyst

913 Points Joined January 2010

X has now paid stamp duty & registration charges to the tune of Rs.50K for his flat which was purchased by him way back in the year 1980. No amount was paid as stamp duty then. Now, on account of amendment in the Bombay Stamp Act, he has been assessed to pay an amount of Rs.50,000/- as stamp duty. This payment has been made by him under the Abhay Yojna (Amnesty scheme) launched by the Collector of Stamps, MMRDA.

In such a scenario, is X eligible to claim deduction u/s. 80C on the amount paid as stamp duty and registration charges ?

Replies (2)

sanjay

STUDENT

35 Points Joined February 2009

Let's say they have a black money of 1 lakh. They purchase a policy of 1 lakh single premium. Now LIC doesn't care or check about the source of the income. So they issue the policy bond. Now the person can sleep at ease because if Income Tax officials do a raid, they won't find the money. However, there is the problem of the policy bond. That can be found by the IT officials. Solution is simple and ingenious. The businessman would take a loan of a small amount (say, a hundred rupees) from LIC. Now, LIC would take the policy bond as a collateral. So in effect, LIC takes care of the safe-keeping of the policy document. The tenure of the loan will usually match the tenure of the LIC policy. So at the end of term (say, 5 years), the businessman gets back the bond which he then uses to liquidate the original investment. Now this money is white as it is the maturity proceeds of an insurance policy. Since IT officials can only dig through three years of paper, they cannot question on the source of funds of the insurance premium. Neat, isn't it ?
Here I am - suggesting simple things like term insurance and mutual funds. So naive !!