Suppose Mr. has paid premium of 25,000 for policy A taken on 30th June 2011 (sum assured 2,00,000) and 12,000 for policy B taken on 1st August 2013 (sum assured 1,00,000). Calculate the amount of deduction Mr. X can claim u/s 80C.

Chapter No. 06 - Deduction u/s 80C

Suppose Mr. has paid premium of 25,000 for policy A taken on 30^th June 2011 (sum assured 2,00,000) and 12,000 for policy B taken on 1^st August 2013 (sum assured 1,00,000). Calculate the amount of deduction Mr. X can claim u/s 80C.

In case of Policy A ceiling limit for premium paid = 2,00,000 x 20% = 40,000

Since premium paid is less than 40,000 (i.e. 25,000), whole amount qualifies for deduction.

In case of Policy B ceiling limit for premium paid = 1,00,000 x 10% = 10,000

Since premium paid is more than 10,000 (i.e. 12,000), only 10,000 qualifies for deduction.

Also, the amount to be received from Policy B at the time of maturity will not be exempt from tax.

Dated: 13-8-2015