Section 80c deduction on insurance premium and ulip

Dear Sir,

On FY 2016-17 an assessee paid insurance premium (premium amount less than 10% of sum assured) and claimed 80C deduction. But in 17-18 he didn''t continue the insurance and it got lapsed. So whether he needs to reverse the 80C claimed during 2016-17. If there is a provision to reverse, whether this provision is strictly adhered by Income tax on scutiny? I have never seen anyone reversing this amount. When i read the section 80C there it is mentioned a minimum period of 5 years ofr ULIP and 2 years for life insurance.

I contacted some insurance agents to know whether there are such conditiona. But everyone said once 80C is claimed there is no need for reversal.

Your reply is much awaited. Thank You.

Replies (1)
Dear Pramod,

As per my knowledge Yes there is need to reverse the amount taken as deduction on Single insurance policy if it terminates before expiry of 2 years (5 in case of ULIPs). So lawfully you should treat the amount earlier claimed as deduction as income of the previous year in which it is being terminated.

But as per in general practice, there is No need to reverse that if the return of that year in which deduction was claimed earlier has been Processed and there is no such scrutiny about that amount. Because if you do that you'll first make your client disturbed that what's wrong going on with his return and secondly you are wilfully claiming to Govt that you have defaulted.

So in my opinion you should not do anything about that becuase in practical life Deptt rarely check that and it gives a lot of advantage to Individual taxpayers but you must make sure that in future you communicate with your client properly before filing the return and Please Don't in Any Manner Stimulate The Tax Evasion.

Thanks.

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
12 October 2026
AUDIT , ACCOUNTS AND TAXATION

KDSS

New Delhi

B.Com

View Details
Company
ARTICLESHIP 28 September 2026
Junior Accountant

J S P M & Associates LLP

Pune

B.Com

View Details
Company
19 October 2026
Accountant

Jari Saree Center

New Delhi

Others

View Details
Company
14 October 2026
GST & TDS ASSISTANT

AGGARWAL SANJAY & ASSOCIATES

New Delhi

B.Com

View Details
Company
06 October 2026
Assistant Manager - Audit and Compliance

Ravi K Jain & Co

Noida

Others

View Details
Company
12 October 2026
Finance

I-Genext Consulting Private Limited

New Delhi

CA

View Details
Company
ARTICLESHIP 20 October 2026
CA ARTICLE

AMKN & CO

Noida

CA Inter

View Details
Company
07 October 2026
Senior Account Manager

Amplio Invest

Mumbai

M.Com

View Details