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Income tax

Asit Panda (Accountant) (159 Points)

24 February 2014

Mr x had taken a housing loan from SBI. At the time of sanctioning Loan bank instistes him for Insurance policy.

So, my question is Can Mr. X Claim the deduction of U/s 80 C for Insurance Premium paid for that policy on bank loan.

Thanking You

Asit Panda

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11 Replies

Yash Nakipuria (Student CA ) (39 Points)
Replied 24 February 2014

Your doubt is not clear to me. Are you asking that can the assessee claim deduction u/s 80C if he pays the premium from the loan amount? If yes, then the answer is yes. An assessee can claim deduction u/s 80C because there is no condition like the amount must be paid out of income chargeable to tax or something like that

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S M K (CHARTERED ACCOUNTANT) (80 Points)
Replied 25 February 2014

as per Section 80 C ; insurance shall include a policy of insurance on the life of an individual or the spouse or the child..

your question is not clear..normally we claim any life insurance policy premiums paid subject to conditions in 80C.

Anubhav (Student) (589 Points)
Replied 25 February 2014

Deduction u/s.80C is available in your case...A life insurance policy is a life insurance policy and exists purely as a separate contract.

Mihir (Wealth Manager) (5293 Points)
Replied 25 February 2014

Yes, the assessee may claim deduction u/s 80C. This is more like a reducing term plan wherein the starting few years the sum assured is high and so is the premium, but as the years go by, the sum assured gets reduced along with the premium. It is sort of a collateral for the bank.

tarun pandey (student) (21 Points)
Replied 25 February 2014

I thik many of us has not understood the ques ...he is asking that bank has asked him for the insurance of the property for which he has taken loan...as they generally ask...so whether insurance premium paid for soch insurance can be deducted under 80c...... Acc to me no as sec 80 c only talks about life insurance and not GIC

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S M K (CHARTERED ACCOUNTANT) (80 Points)
Replied 25 February 2014

Yes ..I agree with Mr.Tarun Pandey

Mihir (Wealth Manager) (5293 Points)
Replied 25 February 2014

In certain cases, the bank may ask for an insurance policy on the life of the applicant, because if the applicant or borrower passes away, severe financial crisis befalls on the dependents of the borrower, and to mitigate the risk, bank ask for the insurance policy on the life of the applicant / borrower, so that in the even of the applicant passes away, the insurance claim proceeds can go to the bank reducing the pressure on the dependents.

Wait for more replies.

1 Like

Ramanuj (Accountant.) (834 Points)
Replied 25 February 2014

Dear Sir

I think you can not claim 80c against paid to loan insurance. Befor you see insurance document if its is show that 80 c Deduction is available then you can claim.

thanks

Ramanuj

CA VIRAL SANGHVI (Finance head) (681 Points)
Replied 25 February 2014

house insurance premium is not deductible u/s 80 C

Naresh Dharia F.C.A. (PROPRIETOR) (426 Points)
Replied 25 February 2014

Asit Panda.... Kindly mention the facts of the case in ur query to get the answer... Ok

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yogesh kumar sarda (student) (27 Points)
Replied 26 February 2014

I think that the bank might ask for life insurance in case of loan .so as we know that life insurance premium is deductible u/s80c. Therefore dedu. Can be availed u/s80c.