There has always been misunderstanding in the mind of us toward claiming the deduction under section 80c for investment made on behalf of the family members. In this article, we will talk about all circumstances, where an individual can get the benefit of deduction u/s 80C for payment on behalf of his/her family members. Every person should plan his investments and plan his taxes. Section 80C of Income tax is one of the part for tax planning. This article seeks to explain the various common questions arise in the mind of a layman like -
- Can I get the deduction u/s 80C for payment on behalf of my wife ?
- Whether making payment of LIC premium to policy of major child will be eligible for claim under section 80C
? - Whether payment of LIC premium of my independent and major child will be eligible for deduction u/s 80C ?
An individual can avail the benefit of deduction under section 80C for payment of investments on behalf of his/her family members (Individual/Spouse/Children) up to Rs. 1,00,000.
- Annuity plans
- Life Insurance Premium
- Public Provident Fund
- ULIP
Life Insurance Premium
In case of an individual policy should be taken on his own life, of the spouse or any child.
Annuity Plan
Annuity plan should be taken in the name of the individual, his wife/her husband on any child of such individual.
Public Provident Fund (PPF)
An individual can open public provident fund account in his own name or in the name of minor of whom he is the guardian. One can get the deduction u/s 80c, deposit in his own account, or his/her spouse or in the account of his /her children.
- Important Note: Under Public Provident Fund (PPF) the maximum contribution is Rs. 70,000/-.
ULIP
ULIP should be taken on his own life, life of the spouse or any child.
Important Notes:
- Hindu Undivided Family (HUF) can also avail the deduction u/s 80C for investment on the name of any member of the family.
Child may be
- Dependent/independent,
- Male/female,
- Minor/major,
- Married/unmarried
Example for life insurance Premium paid for family members
Compute the eligible deduction u/s 80C for payment by a on behalf of his family members as following
- LIP (Life Insurance Premium) on his own life – Rs. 20000/-
- LIP on the life of his wife – Rs. 30000/-
- LIP on the life of his major son (Not Dependent on A) – Rs. 40000/-
- LIP on the life of his dependent brother – Rs. 5000/-
Amount eligible for deduction u/s 80C will be Rs. 90000 (20000+30000+40000) except LIP on the life of his dependent brother.
Related posts:
- Cash Payment of LIP is Allowed for Deduction u/s 80C
- Minimum Holding Time Limit for Claiming Deduction u/s 80C of Some Investments
- Can a Female Member of the Family Run HUF (Hindu Undivided Family)?
- Insure Your Health And Save Tax Too!
- Section 14A Income Tax Act – Minda Investments – An Analysis
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{ 22 comments… read them below or add one }
Dear Sir,
Thank you
sir such type article increase the knoledge for growing assessee
atul
good news, looking forward for the day
You earn gratitude of people by giving useful tips on income tax planning.
In this article on 80C you have certainly given information which if known earlear would have given me savings of tax for life insurance premium paid by me for a number of years for LIC policies of my major & independent son.
Thanks.
NC TYAGI
thank a lot sir
most of the assessee dont know the actual provision of sec 80C
this can help to plan tax to all assessees
regards
Thank u sir…it was very informative for the practical purpose. But i have one suggestion , it would be much informative if the clarification is supported by mention of relevent section/circular/Notification etc..
IT IS VERY USE TO GIVE ADVISE TO REDUCE TAX WHEN THEIR IS TAX LIABILITY
E TAXINDIA is very helpful. I have got the knowledge on some points on which i want have to. I think a regular follower of updates from this site himself can file his income tax return.
Yes, you are right…. I will try to mention all relevant sections, circulars and notifications………..
thanks for suggestion
Such interesting articles dispel the doubts of even tax consultants and chartered accountants, who have been in the profession for quite long, especially in rural and small town areas.
The new breed of assessees who are mostly from Salaried class are exploring more and more possibilities of tax planning by using this useful section 80C
Please do write on ” Repayment of housing loans, when the house was not yet completed and repayment of housing loans when the house was not used for self occupation”, so that benefit under section 80 C could be fully utilised
I hope more articles in this nature shall benefit the public at large
I read inthe books that the deduction with regard to LIC premium paid, can be claimed only to the maximum of 20% of sum assured in the policy. But nothing mentioned here about it. why so?
I read in the books, that the deduction with respect to amount paid as LIC premium can be claimed to the maximum of 20% of sum assured in the POLICYor Actual ,(which ever is less) . But nothing mentioned here about it, so is it valid or not?
You are doing a great job for us.
thanks a lot
your article is very usefull to update in the filed of taxation and tax planning.
What in case of Employer taking ULIP policy for his employee?
Sir,
Thanks for your details on section 80. I have a query. are we entitled to receive rebate for LIP of parents?
Regards
P.T. Srinivasan.
Thanx a lot for enhansing our knowledge. I have a small query ,Like LIC premium,whether one can take benefit of ELSS investments made by spouse,While calculating 1 lakh limit of sec 80 C.
THANK YOU FOR UR CONTRIBTION TO OUR KNOWLEDGE
I ALWAYS SEARCH FOR SUCH TYPE OF KNOWLEDGE BANKS WHICH HELP ME OUT IN MY PRACTICE AND IT IS ALSO LERNING SOURCE FOR ME
LOOKING OUT FOR SUCH OTHR ARTICLES
THANKING YOU.
can any one guide me for the following query.
my freinds’ father had a throat cancer and lost his tone. now by using artificial speaker near to the neck he is converting his sound as voice. Expenses spent by him for the treatment is more that 2 lakhs.
kindly suugest me whether he is eligble to claim exemp u/s.80DD for medical treatment & 80-U for severe disability.
Thanks for the Information.
I have a small Query,I want to know that FD Interest is taxable but its at the time of maturity or its on 31 st March.
Like if we have a FD for Rs. 50,000 from Jan 01st 2010 @ 8 % then interest for the YEAR 2009-10 Would be 1000 for Three months or it should be added in Next year Assessment Such that in 2010-11 Full amount 4000.
I have another Salary Income of 195000 Also.
Waiting for Reply !!
Regards
Sandeep
Dear sir,
We are getting Transport allowance which includes in my total salary i.e. (Basic + DA+ other allowances) whether will get exemption 70 % of this allowance??
The list is not exhaustive.The 100000 limit of 80C itself is not totally available.For example, we can deduct the EPF from this amount.This means for an average employee, the limit reduces by 5000 to 10000.Next to this, if you have any children, the school fee goes into this account.This will considerably reduces the limit for parent assessee by around 24000.This means we have a choice of 70000.Subtract the insurance policy, say around 10000, you may even go upto 30000 depending upon your policy already taken.This reduces the saving potential in 80C to mere 40000 to 50000.If you are a regular investor, and reinvest any past investments made, you will literally adding nothing to this section.I forgot to add the Principal payment into this account , if you have a home loan.
The Conclusion:The 80C limit as of now is out of date.It must be doubled.Also the basic exemption limit should be doubled.Then only the new tax code will be reasonable.Othewise, the FM will continue looting the hard earned money.
Is it possible if My mother is investing PPF amount in my daughter’s a/c and she is taking deduction u/s. 80C. is it eligible or not ?