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LIP premium

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harsh Sojitra

30 Points Posted on 05 May 2020

how much deduction in 80C can be taken ? Any amount of premium paid subject to max. 1.5 lacs or the rule of 10%. 20% of sum of capital assured will be applicable ?

Replies (2)

Quick Summary

This discussion clarifies the rules for claiming deductions on Life Insurance Premiums (LIP) under Section 80C of the Income Tax Act. You can claim a maximum deduction of up to ₹1.5 lakh, which includes other eligible investments. Crucially, the annual premium paid for a life insurance policy must not exceed 20% of the sum assured to be eligible for this deduction.

RAJA P M

"Do the Right Thing...!!!"

77792 Points Posted on 05 May 2020

You can avail 1.50 lakhs deduction as per section's ceiling. Also the 10% sum is applicable for premium.

Suresh Kumar

Accountant

52 Points Posted on 05 May 2020

1st point is how much maximum allowed in 80c i.e. 1.5 lakhs (life insurance premia, tuition fee, PPF, GPF, NSC etc). . 2nd point is u can claim premia of life insurance policies under 80C only for such policies which have a premium of less than 20% of the sum assured. eg. If the policy sum assured is 10 lakhs, and annual premium is 2,10,000 then u cannot claim that policy u/s 80C. however if annual premium is 2 lakhs or below then u can claim u/s 80C. (and this 2 lakhs will be restricted to 1.5 lakhs ceiling)