Tax for Policy premium paid in April for March’s due date

Hi,

There was a policy premium due for March 2021. But, its premium was paid in April 2021.

Its premium is deductible for tax saving under section 80c.

Now, can that tax deduction be claimed for the financial year 2021-22 since the premium was paid in this year?

Or it could have been claimed only for the year 2020-21 since the premium was actually due for that year.

Please help.

Thanks in advance!

Replies (6)
Quick Summary
This discussion addresses whether an insurance policy premium, due in March but paid in April, can be claimed as a tax deduction under Section 80C for the financial year of payment. While ideally, the deduction should align with the period the premium relates to, the consensus suggests that the payment date is the determining factor for claiming the deduction in the current financial year (2021-22). It's important to ensure consistency and proper record-keeping to avoid issues.

Insurance policy will be considered under 80C in the year of payment..

It's eligible for current FY

While you shouldn't, the reality is that yes, you can.

But ensure that you stay consistent and don't double count in the future to avoid needless complications. 

To repeat again, you shouldnt, but you can!

Oh and needless to day, make sure your books are balances (ie if you're claiming the expense, it must have gone from somewhere!).

It's premium can be claimed in 2020-2021 provided the proposal was given in mar 2021
But it can be claimed in ay 2021-22
Payment date is relevant , you may consider for current year

Thank you everyone!

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