TaxTMI 
TaxTMI 
Deduction in respect of life insurance premia, deferred annuity, contributions to provident fund etc. -(New) Section 123 / (Old) Section 80C
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....h generally contains conditions regarding premium limits and policy eligibility). Disallowance of and taxation of deduction already allowed Where the assessee terminates his contract of insurance, by notice to that effect or where the contract ceases to be in force by reason of failure to pay any premium, by not reviving contract of insurance,- • (a) in case of any single premium policy, within two years after the date of commencement of insurance; or • (b) in any other case, before premiums have been paid for two years. (b) Salary deduction for deferred annuity Following condition satisfied cumulatively • Sum paid under a deferred annuity contract • other than the annuity plan referred to in clause (1) on life of the • individual, • spouse of the individual and • any child of the individual, and • Such contract does not contain an option to • receive cash payment in lieu of the annuity; (c) Contribution in Deferred Annuity Pension Plans by Government Employees • sum deducted from salary payable by or on behalf of the Governmen....
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....urance Plan, 1971 specified in Schedule II of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002). • (k) Contribution for participation in unit-linked insurance plan of Life Insurance Corporation Mutual Fund, referred to in Schedule VII (Table: S1. No. 20 or 21), as may be notified by the Central Government. Disallowance of and taxation of deduction already allowed • Where the assessee terminates his participation in such plan, by notice to that effect or where he ceases to participate by reason of failure to pay any contribution, by not reviving his participation, before contributions in respect of such participation have been paid for five years. (l) Annuity plans of LIC or notified insurer • Sum paid to effect or to keep in force a contract for annuity plan of the Life Insurance Corporation or any other insurer notified by the Central Government; (m) Mutual Fund units • Subscription to any units of any Mutual Fund referred to in serial number 20 or 21 of the Table in Schedule VII or from the Administrator or the specified company under any plan formulated in accordanc....
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....house property before the expiry of five years from the end of the tax year in which possession of such property is obtained by him; or • (b) receives back, whether by way of refund or otherwise, any sum specified in that clause. (s-v) Five-year bank fixed deposits • Term deposit for a fixed period of not less than five years with a scheduled bank, and which is as per such scheme framed and notified by the Central Government; • Five years term deposit in an account under the Post Office Time Deposit Rules, 1981; • Condition for taxation • If any amount, including interest accrued, is withdrawn by the assessee, before the expiry of the period of five years from the date of its deposit, it is taxable in the said tax year. • Manner and amount of taxation in the tax year in which condition is fulfille • (a) The amount so withdrawn shall be deemed to be the income of the assessee of the tax year in which the amount is withdrawn and shall be liable to tax in the said year; • (b) the amount liable to tax, as referred in clause (a), shall not include the following amounts :- ....
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....otified by the Central Government, to the extent of- • (i) For Employees - 10% of salary, including dearness allowance, if the terms of employment so provide, but excluding all other allowances and perquisites, during the tax year in the case of an employee of the Central Government or any other employer; or • (ii) For Self Employed - 20% of gross total income during the tax year in the case of any other individual; • Condition for taxation • Where any amount standing to the credit of the assessee in the pension scheme, in respect of which a deduction has been allowed, together with the amount accrued thereon, if any, is received by the assessee or his nominee, in whole or in part, in any tax year, and if such amount is not used for purchasing an annuity plan in the same year- • (a) on account of closure or his opting out of the pension scheme (except when received by the nominee on the death of the assessee); or • (b) as pension received from the annuity plan purchased or taken on such closure or opting out. • Manner and amount of taxation in the tax year in which condition is ful....
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....xpayer for insurance policy on own life, spouse life and life of any children (Child may dependent, independent, married or unmarried) & in case of HUF the policy can be any member of the family shall be included in Section 80C deduction. • Life insurance premium paid for parents (father / mother / both) or in-laws is not eligible for deduction under section 80C. • In case if the premium is paid for more than one insurance policy, all the premiums can be included. Notes: • In case of an individual, policy should be taken on his own life, spouse, or any child (Dependent/independent, major/minor, married/unmarried). • In case of a HUF, policy can be taken on the life of any member. • Insurance premium cannot exceed the maximum celling limit given below: • If policy is issued: Policy on the life of a person given in 80U/80DDB Policy on the life of any other person Before 1^st April 2012 20% of sum assured* 20% of sum assured* During 2012-13 10% of sum assured** 10% of sum assured** On or after 1^st April 2013 15% of sum assured** 10% of ....
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.... investor along with the interest of the earlier years and the capital amount. • Infrastructure Bonds: • These are also popularly called Infra Bonds. These are issued by infrastructure companies and not by the Government. The amount invested in these bonds are included in 80C deductions. • 5-Yr bank fixed deposits (FDs): • Tax-saving fixed deposits (FDs) of scheduled banks with tenure of 5 years are also entitled for section 80C deduction. • Senior Citizen Savings Scheme 2004 (SCSS): • A recent addition to section 80C list, Senior Citizen Savings Scheme (SCSS) is the most lucrative scheme among all the small savings schemes but is meant only for senior citizens. • Current rate of interest is 9.20% per annum payable quarterly. • Unit linked Insurance Plan: • ULIP stands for Unit linked Saving Schemes. • ULIPs cover Life insurance with benefits of equity investments. • They have attracted the attention of investors and tax-savers not only because they help us save tax but they also perform well to give decent returns in the long-term. ....