No tax benefit available on premium paid for parents’ life insurance

Uttam Kumar

This deduction was available only till FY12 under Section 80CCF of the IT Act. Hence, you can claim deduction of R1 lakh under Section 80C only.

I purchased a house last month by taking a housing loan from SBI. I am paying equated monthly instalments (EMIs) to the bank. Can I claim payment of such EMIs as investment benefit under Section 80C?

PS Rao

The EMI consists of two components: principal amount and interest. The principal component of the EMI qualifies for deduction under Section 80C as repayment of housing loan. Further, the amount paid as stamp duty and registration charges at the time of purchase will be eligible for deduction under Section 80C. You can also claim interest expenses actually paid, subject to a maximum of R1.5 lakh, as loss from house property. The income from a house property can be deducted from the income from salary while computing the taxable income for the financial year.

I want to take an insurance policy in the names of all my family members — my wife, two daughters and parents — to claim deduction under Section 80C. Can I claim the deduction in respect of such premium payable to LIC under Section 80C?

Akash Sharma

As per provisions of Section 80C, life insurance premium can be claimed for tax rebate by an individual only where the policy is taken for his own benefit, or his/her spouse, or their child. Therefore, you won’t get any tax benefit on premium paid for life insurance policies of your parents.

I want to take a pension plan for my retirement. However, I have already reached my investment limit of R1 lakh under Section 80C. Can I claim the deduction in respect of investment in a pension plan over and above Section 80C?

Ram Kumar

Section 80CCC of the Income Tax Act stipulates that an investment in pension funds is eligible for deduction from your income. The total deduction available for investments under Section 80CCC and Section 80C is R1 lakh. This also means that your investment in pension funds cannot be claimed as deduction u/s 80CCC in addition to the Section 80C limit.

The writer is founder of RSM Astute Consulting Group