Deductions u/s 80C/80CCC of I. T.Act

Dear Sanjay Sir,

For me - "Yes" deduction will not be denied merely on the ground that the investment was made in the name of the spouse. What is to be seen is the beneficial ownership & not the nominal ownership nevertheless the same is to be proved before AO, if required.

Person to whom deduction is admissible - The deduction under section 80C can be claimed by the person who has contributed the monies out of his income chargeable to tax. It can be claimed by the first-named person in a joint holding if the first-named person has so contributed the amount.

The deduction under section 80C is to be given to the person who has purchased the NSCs out of his income chargeable to tax.

The interest accruing on the subscripttion to the NSCs will be included in the hands of the person who has subscribed from his income chargeable to tax.

The amount of interest re-invested will satisfy the test of having been paid out of income chargeable to tax to get the NSC and so will be entitled to deduction under section 80C.

Where subscripttion to the NSCs in the name of any member of the HUF, is shown by the family to have been made out of its income chargeable to tax and the beneficial ownership in such certificates vests in the family, the family would be entitled to a deduction under section 80C with reference to such contribution.

The interest accrued would be included in the hands of the persons who purchased the NSC out of their income chargeable to tax.—Circular : No. 405 [F. No. 178/1/84-IT(A-I)], dated 15-1-1985 as corrected by Circular : No. 418 [F. No. 178/1/84-IT(A-I)], dated 2-5-1985.

Premium paid on policies in name of adult children - Relief under section 80C is available in respect of premia paid on the life insurance policies on the lives of adult children, irrespective of their status; for example, premia paid on a policy on the life of a married daughter. This relief will continue to be available under the new section (section 88) introduced by the Finance Act, 1990, as the language of the new section is in pari materia with that of section 80C of the Act—Circular : No. 574, dated 22-8-1990.