IS Late fees paid on LIC premium allowed for Sec 80 C exempt

not allowed

Agree With U S

not allowed

not allowed

Dear Friends,

Normally to avoid any future tension, CA's are not taking interest amount in consideration BUT

as per Section 80C(2) any sums paid or deposited in the previous year by the assessee—

           (i)  to effect or to keep in force an insurance on the life of persons specified in sub-section (4);

is allowable for deduction subject to:

* Total amount paid under this section should not be more than 1 Lac (Except given exception)

*  Where, in any previous year, an assessee—

           (i)  terminates his contract of insurance referred to in clause (i) of sub-section (2), by notice to that effect or where the contract ceases to be in force by reason of failure to pay any premium, by not reviving contract of insurance,—

      (a)  in case of any single premium policy, within two years after the date of commencement of insurance; or

      (b)  in any other case, before premiums have been paid for two years;

In the light of above text from bare act, In my opinion any amount paid within two years of last payment under the said policy, to keep that policy in force, is allowable under this section.

However,following link can also be checked for proper understanding and making mind in this regard:

1. https://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2009ITAct/cirsec80c.htm

2. https://law.incometaxindia.gov.in/DIT/File_opener.aspx?page=ITAC&schT=&csId=de2e44de-d3f9-4153-9b35-f47bd711340e&rdb=sec&yr=75996b99-a798-4098-bca8-e66ee23fe426&sec=80c&sch=&title=Taxmann%20-%20Direct%20Tax%20Laws

3. https://www.pdicai.org/ansDisp.aspx?queId=11262

4. /blog/it-rebate-on-late-fee-paid-for-life-insurance-premium-388.asp

5. https://www.policywala.com/showthread.php/938-Rebate-on-Late-fee-paid-for-Life-Insurance-Premium?p=2366&viewfull=1

Thanking you,

yours in service,

DM

Allowed Agree With DM Sir

Agreed with D Maheshwari Sir

late fees interest on LIC is not allowed.

allowed

Interest is paid to keeping the policy in force , hence interest is allowed U/s 80C.

(5) Where, in any previous year, an assessee—

           (i)  terminates his contract of insurance referred to in clause (i) of sub-section (2), by notice to that effect or where the contract ceases to be in force by reason of failure to pay any premium, by not reviving contract of insurance,—

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as per LIC terms grace period of 30 calander days are available for payment without interest, afterwards the insurence does not works unless the permiums are regularized, so it comes as breach of contract.

Late fees on LIC Premium is not allowed as deduction u/s 80C. Only actual amount of premium is allowed.

Whoever is saying here not allowed, please give reasons too, so that we can arrive at a conclusion.

I have said that its allowed and given reasons also...

@ U S Sharma: can you pls give your conclusion from the above "copy Paste".

All students and learned members, Kindly don't just give your decision like given by Mr. Pratik Sirwani, thats its disallowed, rather please give explanations that why its allowed or disallowed...

Thanks Mr. Dasrath, we should give reason instead of decsion,

As per my opinion Interest is not allowed, beacause SEC.80C tells about premium paid to LIC not for interest. 

LIC charges interest as a penalty for delay in deposit. This interest amount is like charges not as investment.