Deduction u-s 80-C

Page no : 2

varun gupta (Senior Accounts Officer) (89 Points)
Replied 07 June 2010

Deduction is availaible on the basis of investments made by tap payer as clearly meintioned in ready reckonar, so mr x is eligible for deduction and not his wife.

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Originally posted by : Parag
	Dear all i'm a CA Fresher! I've a doubt on the aforesaid subject! I know it seems useless to have a doubt on it but I've as there's a conceptual mismatch between our CA Fraternity itself. The case is - Mr.X pays Rs.2 lacs LIP from his bank a/c on policies in his wife Mrs.X's name! Now the question that arises is - WHO CAN AVAIL THE DEDUCTION? Text of the Section 80-C reads as "ANY PAYMENT MADE BY AN INDIVIDUAL" So in this case, me & my CA Fresher friends are of the opinion that only Mr.X can claim the deduction as HE has paid the sum & not Mrs.X! HOWEVER, MY EMPLOYER CA IS OF THE OPINION THAT EITHER OF THE TWO SPOUSE CAN CLAIM DEDUCTION! HE FURTHER AFFIRMED THAT [u]IT IS NOT NECESSARY THAT PAYMENT OF LIP BE MADE BY ANY OF THE SPOUSE i.e. EVEN A THIRD PARTY CAN PAY LIP OR DEPOSIT SUM IN PPF A/C & DEDUCTION CAN BE CLAIMED BY MR.X OR MRS.X.[/u] I find his opinion contrary to the text of the section as the principal of payment based deduction is violated! Kindly advise me on the same as in what should be done in this case! regards Parag