Whether Deduction under section 80C is allowed if premium is paid on Lapsed Policy ?
Pl. clarify
21 Replies
FATEMA
(CHARTERED ACCOUNTANT)
(719 Points)
Replied 16 November 2009
The deduction u/s 80C can be claimed if you are paying premium for a lapsed policy
CA Dhiraj Ramchandani
(CA, M. com)
(10823 Points)
Replied 16 November 2009
Sunil
(Trader)
(2611 Points)
Replied 16 November 2009
For Section 80 C you have to keep the insurance contract alive for the lock in period otherwise whatever 80C you have claimed already will be added back to your income income in the previous year of lapsing.
Now if your policy was old and it lapsed due to default in payment within grace period and within the same financial year you had it reinstated, it would be a continuity of the same policy and there would be no problems. If you reinstate it after a very long time say that it goes to the next financial year, then after reinstatement, for safety sake you at least continue without fail till the new lock in period determined from date of reinstatement.
The problem comes up if your initial policy itself lapses before the lock in period for 80C. If you have not reinstated it before the end of the previous year, you will have to surrender your deductions claimed already as income from Other Sources. However, when you get policy reinstated, your lock in period is reset and it will be like a fresh policy that you have to keep alive for a lock in period based on date of reinstatement.
In either case you can claim 80C on the premium paid but you should comply with the conditions of deduction.
C.A Minakshi Paliwal
(Chartered Accountant)
(38 Points)
Replied 16 November 2009
yes u can claim deduction
jagdishkumar Ratanlal Solanki
(ARTICLE )
(32 Points)
Replied 16 November 2009
Whether deduction is Allowed on late fee of LIc?
Ankit 21 CA,CS,B.Com
(CA)
(3949 Points)
Replied 16 November 2009
The deduction u/s 80C can be claimed if you are paying premium for a lapsed policy
Deepak Tapse
(Accounts Manager - Taxation)
(1771 Points)
Replied 16 November 2009
Deduction is not allowed on late fee charges or interest.
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