Abhishek Soni, co-founder, Tax2Win, says that there are certain conditions attached to the deduction and a person can claim deduction in tax only if he fulfills these conditions. Failure to do so may result in the exemption being withdrawn.
New Delhi. Be careful if you wrongly avail tax exemption under Section 80-C of the Income Tax Act. The government can also take this money back from you. So it is important that you also know about the rules due to which your savings can be withdrawn.
In an article published in Moneycontrol, Abhishek Soni, co-founder, Tax2Win, says that there are certain conditions attached to the deduction and a person can claim deduction in tax only if he fulfills these conditions. He has said that if the person does not fulfill the conditions, then his deducted amount of the previous previous financial year will be considered as income in the next financial year.
What conditions to take into account
If you invest in a scheme and claim deduction on its basis, remember that you have not made premature withdrawal from that scheme. If you have done so then it will affect your deduction. Apart from this, the effect of transferring the scheme on which you are claiming deduction before the stipulated time will also affect the deduction. This means that if you stop investing in the scheme, make premature withdrawals or make many more premature transfers, then your deduction will be affected.
Insurance policy
Some people buy an insurance policy a month before filing the return in March to take advantage of it. But here you have to note one thing that if you took a normal life insurance policy and stopped it after paying the premium for 2 years, then the tax deduction will be withdrawn. It is worth noting that at present, under 80-C, only those life insurance policies are available whose premium is 10 percent of the policy’s sum assured. If the premium exceeds 10%, then you will have to pay tax on the amount received after maturity.
Keep this thing in mind in case of property
You get exemption under 80-C on the principal of the home loan, but if you sell the house within 5 years of purchase, then the tax exemption you get will be withdrawn and you will also have to pay capital gains tax.
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