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
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.
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