29 July 2011
According to Income Tax Act, one can claim 80C deduction upto Rs.100000.But for eg. a person pays his LIC Premium of Rs.80000 whereas if the sum assured is Rs.100000(i.e 20 percent on Rs.5 Laks which is the sum assured), den what is the exact amount he can claim for deduction?
29 July 2011
Maximum LIC deductive u/s 80C is 20% Insured amount subject to Rs. 100000. Eg. LIC is for Rs. 10,00,000 and premium amount is Rs. 3,00,000.
the max he can claim is Rs. 1 lakh only. 20% is 2 lakhs but subject to Rs. 1 lakh.
29 July 2011
What this actually means is You will get deduction u/s 80C for LIC Premium actually paid----But the said deduction can not be more than--- Rs 1 lacs which is the limit u/s 80C or 20% of Sum assured.
Say Sum Assured Rs 10 Lacs. Premium paid Rs 90000/- 20% of Sim Assured comes to Rs 2 Lacs
In this case actual deduction will be Rs 90000/-
Suppose if instead of Rs 90000/- premium paid was Rs 110000/- in that case you will get deduction of Rs 100000/- only as it is 80C limit.
Finally-- Say premium paid is Rs 25000/- Sum Assured Rs 100000/- 20% of Sum Assured comes to Rs 20000/- So you will get deduction of Rs 20000/- only.
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