Life insurance premium deduction turns on actual payment by the taxpayer, not policy ownership.

Deduction under section 80C(2)(a) depends on who actually pays the life insurance premium out of taxable income, not on ownership of the policy. For an individual, premiums paid by him on his own life, or on the life of his wife or child, qualify; for an HUF, the premium must relate to a policy on a family member's life. Where the assessee confined the claim to the premium actually paid by him and that payment was undisputed, the deduction was allowable to that extent and the corresponding disallowance was incorrect.

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Issues: Whether the assessee was entitled to deduction under section 80C(2)(a) of the Income-tax Act, 1961 in respect of the life insurance premium actually paid by him out of his own income, notwithstanding that earlier premium payments had been made by the HUF.

Analysis: Under section 80C(2), deduction is available to an individual for premiums paid by him out of income chargeable to tax to effect or keep in force an insurance policy on his own life or on the life of his wife or child, and to an HUF where the premium is paid in respect of a policy on the life of a family member. The decisive factor is who actually paid the premium, not ownership of the policy. The assessee restricted his claim to the amount actually paid by him, and that payment was not disputed.

Conclusion: The assessee was entitled to deduction under section 80C(2)(a) of the Income-tax Act, 1961 for the sum of Rs. 3,462 actually paid by him, and the disallowance was incorrect to that extent.

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