Say, an assessee pays Rs.150000/- towards LIC premium and other investment avenues available under Sec 80C.
Until A.Y.2005-06 there was a clause that the payment has to be made out of income chargeable to tax. However, this is not the case from A.Y.2006-07.
So my query is, whether the excess Rs.50000/- can be availed by assessee’s wife in her income tax return as deduction under Sec 80C. The assessee would debit the excess Rs.50000/- to his wife’s account in his books and would show that as amount receivable from her. Is it valid in the current scenario when there is no restriction on payment out of income chargeable to tax?
2 Replies
Ashu Gupta
(Chartered Accountant)
(40 Points)
Replied 14 May 2007
Yep, the same can be done. Just dont forget to pass the necessary entries in the books of both people.
Ashu
P S R V V Surya Rao
(Chartered Accountant)
(19 Points)
Replied 17 May 2007
Please sec80C(2). It reads the amount 'paid or deposited by the assessee'. Accordingly the assessee who actually paid or deposited can only claim the benefit. The amendment is not relevant as one hast to first see the payment. Once the payment is made by the assessee, the the source is immaterial. Hence your idea is not tenable.
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