if the policyholder pays any sum to LIC to keep policy in force, then allowed, but when the person breach the contract and policy goes inactive after 30 days of due date ( rem the interest is charged only after 30 days) then its renewal or revival, and the interest is charged for this period only. keeping in force and revival/renewal are diff terms,

Its Allowed .

Originally posted by : Avinash
	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.

Thnks for giving reasons,

but pls read first 5 lines of 80C and than comment... 80C don't say abt premium, rather it says, any payment to keep policy in force!

Originally posted by : BARKHA MITTAL
	late fees interest on LIC is not allowed.

Hello Barkha,

Where it is mentioned, can you give some explanation?

Dear All,

The post is still not concluded, who ever mentioned "Not Allowed", Please give reason it giving any case law or explanation or notification texts... However, section is clear about giving the benefit to the assessee.

No interest will not be allowed.

U needed proof.

Check out this link Mr Dashrath

/experts/deduction-for-lic-premium-155026.asp

Regards,

Rahul

Originally posted by : Rahul Agarwal
	No interest will not be allowed. U needed proof. Check out this link Mr Dashrath /experts/deduction-for-lic-premium-155026.asp   Regards, Rahul

Rahul, I have checked the link, everyone is free to give his advice, but brother, you are going to be a CA, check that link again and tell me is that really a PROOF.

I appeal all the CCI Members that never assume answers given by caclub members as authenticated without reason. better to go through Law sections and case laws. however, in the link given by Rahul, one of the learned member has said that interest paid on LIC Premium is not allowed, but he has given the decision not the reasons. 

 I do agree with CA. D.Maheshwari,also i appreciate his views and facts he told regarding the matter.

hence as per the links and information provided by sir DM, regarding the fact it is clear that deduction is allowed on fulfillment of certain circumstances.

Regards

RAJESH

Originally posted by : CA. Dashrath Maheshwari
	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

non payment of premiums amount to termination and thereafter revival only. so the "extra" sum paid towards removal of termination can never be part of "premiums" 

• keep in force - simple interpretation - to continue without any breach of contract..............
• fine/penalty/interest ............ that the contract of payment of regular premium is tempered and contract is broken, and then again restored with additional payment. 
• Interpretations change person to person not the laws / rules :)

to be simple...

if any amount paid for Life insurance (including the late fees) is paid

1. on or before the due date of such paymnet or within 30 days of such due date = Amount actually paid shall be allowed u/s80C as it is paid to continue the contract....

OR

2. after the 30 days of suc h due date any amount paid as delayed payment shall not be allowed as deduction as the case will fall in deemed termination of LIC contract after thje expiry of 30 days from such due date...

and the amount paid after such time (i.e. after 30days) shall include = Delayed Charges + Original Premium

The delayed charges for such purpose shall be deemed to have been paid to Re-initiate such contract. & thus shall be disallowed

Allowed

Originally posted by : Anuraag Sharma
	to be simple...   if any amount paid for Life insurance (including the late fees) is paid 1. on or before the due date of such paymnet or within 30 days of such due date = Amount actually paid shall be allowed u/s80C as it is paid to continue the contract.... OR 2. after the 30 days of suc h due date any amount paid as delayed payment shall not be allowed as deduction as the case will fall in deemed termination of LIC contract after thje expiry of 30 days from such due date... and the amount paid after such time (i.e. after 30days) shall include = Delayed Charges + Original Premium The delayed charges for such purpose shall be deemed to have been paid to Re-initiate such contract. & thus shall be disallowed

I appreciate your explanation, but my bro, that we already understood, here we are not discussing about what is interest, penalty .. etc etc.., we are discussing any payment over and above regular premium, paid for the policy is allowable or not..

obvious not allowed

interest is paid for "revival" 

premium is paid for "keep in force" or "continuation"

sum paid to "keep in force" is only allowed

he world 'Revival' means 'To bring back to life.' In cash of LIC 'Revival' is required when a policy gets lapsed if the premium is not paid within the grace period (minimum 1 month if mode of payment is Yly/Hly/Qly and 15 days if mode is monthly). If a policy gets lapsed it can be revived any time within 5 years from the date of first unpaid premium. The lapsed policies can be revived under the following 5 different schemes.

BUT as per section 80C, if a policy revived  (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;

the sum paid is allowed for deduction.