I have following doubts. 1. HRA - Receipt My one of friend paid Rent of Rs. 4000/- P.m Non metro City FY17-18. whether it is mandatory to received receipt against rent paid,or not necessary upto Rs. 5000/- 2. He paid Post life insurance during the Fy17-18 it is also come under 80 C deduction or not?
Ps:- salaried employees drawing house rent allowance upto Rs.3000/- per month will be exempted from production of rent receipt. It may, however, be noted that this concession is only for the purpose of tax-deduction at source, and, in the regular assessment of the employee, the Assessing Officer will be free to make such enquiry as he deems fit for the purpose of satisfying himself that the employee has incurred actual expenditure on payment of rent.
28 July 2024
Under Section 80C of the Income Tax Act, 1961, premiums paid on a Life Insurance Policy (PLI) are eligible for deduction, but there are specific conditions and limits to be aware of:
### Deduction Limits and Conditions:
1. **Maximum Deduction Limit:** - The maximum deduction allowed under Section 80C, which includes premiums paid on a Life Insurance Policy, is ₹1.5 lakh per financial year. This limit is a cumulative cap for all eligible investments and expenses under Section 80C.
2. **Premium Amount:** - The deduction for premiums paid on a Life Insurance Policy is subject to the total limit of ₹1.5 lakh. There is no specific cap on the amount of premium you can claim within this limit, as long as it is part of the overall limit for Section 80C.
3. **Policy Conditions:** - **Premium Payment:** The premium must be paid for policies in the taxpayer’s name, their spouse, or children. - **Taxable Amount:** Premiums must be paid on policies issued by an insurer registered with the Insurance Regulatory and Development Authority of India (IRDAI).
4. **Additional Conditions:** - **Policy Term:** For policies issued on or after April 1, 2012, the premium must not exceed 10% of the sum assured to qualify for the deduction. For policies issued before April 1, 2012, the premium must not exceed 20% of the sum assured. - **Sum Assured:** The sum assured is the guaranteed amount that the policy will pay in case of the death of the insured or upon maturity.
### Example:
- **Premium Payment Scenario:** - If you pay a total premium of ₹50,000 for a life insurance policy, this entire amount can be claimed under Section 80C as part of the ₹1.5 lakh limit, provided the overall total of all 80C investments does not exceed ₹1.5 lakh.
- **Combination with Other 80C Deductions:** - If you have other eligible investments or expenses under Section 80C (such as PPF, ELSS, NSC), the total of these combined with the insurance premium should not exceed ₹1.5 lakh for claiming the full deduction.
### Summary:
- **Eligible Deduction Amount:** Premiums paid on a life insurance policy can be claimed under Section 80C, subject to the overall deduction limit of ₹1.5 lakh per financial year. - **Policy Compliance:** Ensure that the premiums comply with the limits set based on the date of policy issuance and the sum assured.
By following these guidelines, you can maximize your tax benefits under Section 80C for life insurance premiums. If you have more complex cases or higher premiums, consulting a tax professional might be helpful to ensure accurate and optimal tax planning.
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