Ask Money Today: Can I pay a life insurance premium for my wife, daughter for tax deduction?

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The 80C deductions can be claimed by the person paying such specified contribution amounts. Such amounts can be paid in respect of persons specified in sub-section (4) of section 80C. In respect of your query:

1. Yes, you will. Contribution to PPF account in the name of any member of HUF can be allowed as deduction U/S 80C against HUF’s income. Your HUF can claim the deduction against PPF deposits in your daughter’s account. Most important point to be looked into is the source of money for this investment. Therefore, you should ensure that the payment is made from HUF bank account. Secondly, by choosing PPF, you have made a very wise decision. The interest rate earned in PPF is reasonably higher and this helps get the benefit of compounding effect over the long term. Apart from deduction U/S 80C as discussed above, you enjoy the benefit of tax exemption for accrued interest and maturity proceeds. 

2. Yes, you can. If you buy an insurance policy in the name of your wife or daughter and such policy is bought from your taxable income, you are eligible for 80-C deduction.

However, it is advised that the upper limit of Rs 1,50,000 may be kept in mind. As an individual, you may have incurred many expenses such as school tuition fees for your daughter, home loan EMI, etc. You should deduct these tax-saving expenses from the Rs 1,50,000 bracket and ascertain how much portion is available for further tax saving. This will help you optimise tax planning with less cash outgo for every rupee of tax saved. New financial year has just begun, and this is a good time not only to plan taxes but execute them. This will ensure less TDS from the employer and in-turn increase in take-home salary.