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Lic premium paid - deduction to be allowed

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Tharun Bondugula

Student

29 Points Posted on 28 August 2014

If a person has paid an LIC premium in March'13 of a Financial year but the cheque has been cleared in bank account in next month i.e., April'13 which falls in next Fin Year , is the LIC premium paid allowed as deduction for FY 2012-13 or not???

Thanks in advance

Replies (9)

CA Neelesh Sharma

56 Points Posted on 28 August 2014

The deduction for LIC is provided only when it is paid by the assessee
in your case the assessee made the payment before the end of the F.Y. but the same is cleared in next F.Y.
Accrual method allows as the deduction but as per the Income tax act u can't allow the deduction further you may search any case law on this matter as it is a questionable matter
but according to me the deduction should be allowed in the next F.Y.

NAVEESH DHAR

ADVOCATE- TAXATION ADVISOR

414 Points Posted on 28 August 2014

Have you got LIC premium receipt ? claim the deduction on the basis of date mentioned in such receipt

Peeyush

Proprietor

42 Points Posted on 28 August 2014

In your lic receipt, the date of depositing cheque shall be mentioned. If it is before march then you shall get the claim. Please note that the same cheque has to be cleared in april.

atul kumar

accounts officer

24 Points Posted on 28 August 2014

Proof of payment in the same year is required to claim deduction

CA AJIT MUNDADA

Practice

26 Points Posted on 28 August 2014

If date of Lic receipt is 31st March or before then deduction is allowed for 80C. Deduction is allowed on payment basis & not on clearance of cheque subject to realisation of cheque