Save your income tax along with medical bill under section 80D by paying Mediclaim insurance premium

What
is Section 80D?

Deduction under this
section is available in respect of payment to Medical Insurance Premium.

Mediclaim Insurance
Policy is the policy on the health of a person. Health Insurance, popularly
known as Mediclaim, protects you against unexpected medical costs, arising
from disease or accidental injuries. As essential financial tool, it ensures
you receive medical care without being burdened of unexpected costs associated
with it. Healthcare costs are rising day by day, it is very important to have a health insurance cover not only for
yourself but also for other members of your family.

Who
can claim the deduction under section 80D?

Any Individual can
claim deduction under this section, whether he is resident or Non-resident,
Indian citizen or foreign citizen.  HUF can also claim deduction under this section if policy is taken on any member of the family. 

What
are the conditions to be satisfied to claim deduction u/s 80D?

Deduction u/s 80D is
available if the following conditions are satisfied –

1.     
Mediclaim Insurance is paid by the
individual or HUF.

2.      Payment
should be made out of income chargeable to tax.

3.     
Payment of Mediclaim Insurance should be
made by any mode other than cash. However, payment on account of preventive
health check-up can be in cash.

 What
is the maximum limit of deduction?

Person can take the
mediclaim insurance on himself, his spouse, his dependent children and also his
parents whether dependent on him or not.

Deduction is available
as follows:

 

Cases

Family
( assessee himself, spouse, and dependent children)

Parents

  •            Nature
    of payment:

a)      Mediclaim
insurance premium

b)      Contribution
made to Central Government Health Scheme or any scheme notified by the
Central Govt.

c)      Payment
on account of preventive Health Check-up

 

  •            Maximum
    amount of deduction:

General deduction [in
case of (a), (b) and (c) given above].

 

 

 

 

Deduction Available

 

Deduction Available

 

Deduction Available

 

 

 

 

Rs. 15,000 or premium paid whichever is less

Rs.20,000 if policy is taken on the life of senior
citizen

 

 

 

 

 

Deduction Available

 

Deduction Not
Available

 

Deduction Available

 

 

 

 

Rs. 15,000 or premium paid whichever is less

Rs.20,000 if policy is taken on the life of senior
citizen

 

Kindly
note:

1.     
Payment on account of preventive
health check-up of self, spouse, dependent children and parents cannot exceed
Rs. 5,000. However, deduction of preventive health check-up is not available to
the member of HUF.

 

2.     
Senior citizen for the aforesaid
purpose is a resident individual and whose age at any time during the Relevant
Financial Year should be 60 years or more.

EXAMPLE-

1. An individual assessee pays (through any mode other than
cash) during the previous year medical insurance premia, out of his
taxable income, as under:

(i) Rs 15,000/- paid for insurance policy on
his health and on the health of his spouse and dependent children;

(ii) Rs 25,000/- is paid on insurance policy on
the health of his parents.

Under the new provisions he will be allowed
a deduction of Rs 30,000/- (Rs. 15,000/- + Rs. 15,000/-) if
neither of his parents is a senior citizen. However, if any of his parents is
a senior citizen, he will be allowed a deduction of Rs 35,000/- (Rs.15,
000/- + Rs.20, 000/). Whether the parents are dependent or not, is not a
consideration for deciding the deduction under the new provisions.

If individual pay the amount of
mediclaim premium from income exempt from tax, Can he claim deduction u/s
80D?

No. The
payment should be only out of income chargeable to tax.

 Can you get deduction u/s 80D for Overseas
Mediclaim policy?

Yes, there is nothing in the provision u/s 80D
which prohibits claim of deduction u/s 80D for medical insurance for overseas
journey. The only requirement, as given in section 80D (5) is that the
insurance companies issuing such overseas insurance should be General Insurance Corporation of India
approved by the Central Government or other insurer and approved by the
Insurance Regulatory and Development Authority (IRDA).

Benefits
of Mediclaim Insurance

Mediclaim insurance not only save your hospital
bill but also save your income tax.  If
you pay your mediclaim insurance of Rs. 15,000 on life of yourself and spouse and
depended children and Rs. 20,000 on the life of parents who is senior citizen,
then you can claim deduction of Rs. 35,000. It means your maximum tax saving
will be Rs. 10,500 if you are in 30% tax slab rate.  

In short we can that say that your net expenditure on
mediclaim insurance is Rs.24500 (Rs.35000-Rs.10500). So Pay insurance premium
and protect yourself from unexpected health cost and also save income tax.

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