Payment of LIC premium can be claimed as deduction under ________ of the Income Tax Act.

Question

Question

This question was previously asked in

UP Police SI (दरोगा) Official PYP (Held On: 21 Nov 2021 Shift 1)

Answer 1

The correct answer is 'Section 80C of the Income Tax Act'

Key Points

Section 80C - Payment of LIC Premium:
- Section 80C of the Income Tax Act allows individuals and Hindu Undivided Families (HUFs) to claim deductions on certain investments and expenses.
- One of the eligible expenses under this section is the payment of Life Insurance Corporation (LIC) premium for policies taken in the name of self, spouse, or children.
- The maximum deduction allowed under Section 80C is ₹1,50,000 in a financial year, which includes LIC premiums and other eligible investments/expenses like PPF, NSC, ELSS, etc.
- This deduction helps reduce the taxpayer's taxable income, thereby lowering their tax liability.

Additional Information

Section 80D - Medical Insurance Premium:
- Section 80D provides deductions for health insurance premiums paid for self, spouse, dependent children, and parents, but it does not cover LIC premiums.
- The deduction amount varies depending on the age of the insured individuals, with higher limits for senior citizens.
Section 80DD - Expenses for Disabled Dependents:
- Section 80DD allows deductions for expenses incurred on the medical treatment, training, or rehabilitation of a dependent with a disability.
- It also covers premiums paid for specific insurance policies designed for the benefit of disabled dependents.
Section 80CCC - Pension Plans:
- Section 80CCC provides deductions for contributions made to certain pension funds, such as annuity plans offered by insurance companies.
- This section is specifically focused on retirement savings and does not include LIC premium payments.