DEDUCTION TOWARDS MEDICLAIM EXPENSES – ALL ABOUT SECTION 80D

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DEDUCTION TOWARDS MEDICLAIM EXPENSES - ALL ABOUT SECTION 80D

DEDUCTION TOWARDS MEDICLAIM EXPENSES – ALL ABOUT SECTION 80D

Deduction Under Section 80D in respect of Medical Insurance Premium (Mediclaim)  paid to keep in force insurance by individual either on his own health or on the health of spouse,  parents and  dependent children or HUF on the health of any members of the family. A Mediclaim policy is a must because should you fall sick or meet with an accident, your medical bills could wipe out your savings.

Nature of payments for claiming deduction-

  1. The whole of the amount paid to effect or to keep in force an insurance on the health of the employee or his family
  2. Any contribution made to the CGHS  or
  • Any payment on account of preventive health check-up of the employee or family, [restricted to Rs. 5000/-; cash payment allowed here]

Quantum of deduction-

  1. Assessee is an individual-

Deduction Under Section 80D in respect of Medical Insurance Premium (Mediclaim) paid to keep in force insurance by individual either on his own health or on the health of spouse, parents and dependent children or HUF on the health of any members of the family. A Mediclaim policy is a must because should you fall sick or meet with an accident, your medical bills could wipe out your savings. Nature of payments for claiming deduction- i. The whole of the amount paid to effect or to keep in force an insurance on the health of the employee or his family ii. Any contribution made to the CGHS or iii. Any payment on account of preventive health check-up of the employee or family, [restricted to Rs. 5000/-; cash payment allowed here] Quantum of deduction- i. Assessee is an individual- ii. Asseessee is HUF Lump sum payment- If amount for family or any member of HUF is paid in lump sum in the previous year to effect or to keep in force insurance on the health of any person specified for more than a year, then Deduction= Appropriate fraction of the amount. (Subject to the limits specified above) For example- Payment made to CGHS scheme= Rs. 1, 70,000.00 for 10 years. Solution- Deduction = 1, 70,000.00/10 = Rs. 17,000.00 Other points- 1. Part payment- If part payment is done by asseessee and part payment is done by the parent, both can claim deduction u/s 80D of Income Tax Act, 1961 subject to maximum allowed. The amount should be paid directly to the insurance company and should be paid by way of other than cash. 2. Payment should be made in any mode other than cash. Cash payment is allowed only in case of Preventive Health Checkup. 3. Deduction is available on yearly basis. Conclusion- Medical insurance, if opted correctly, can bring two benefits at the same time. However, with so many options available in the market, it is important to analyze every option according to the personal requirements. Also, while admitting the patient in case of medical emergency, ensure that the hospital is empanelled in the list of approved hospitals to claim cashless benefit from the Insurance Company.

2. Asseessee is HUF

 

 

 

 

Lump sum payment-

If amount for family or any member of HUF is paid in lump sum in the previous year to effect or to keep in force insurance on the health of any person specified for more than a year, then

Deduction= Appropriate fraction of the amount. (Subject to the limits specified above)

For example– Payment made to CGHS scheme= Rs. 1, 70,000.00 for 10 years.

Solution– Deduction = 1, 70,000.00/10

= Rs. 17,000.00

Other points-

  1. Part payment- If part payment is done by asseessee and part payment is done by the parent, both can claim deduction u/s 80D of Income Tax Act, 1961 subject to maximum allowed. The amount should be paid directly to the insurance company and should be paid by way of other than cash.
  2. Payment should be made in any mode other than cash. Cash payment is allowed only in case of Preventive Health Checkup.
  3. Deduction is available on yearly basis.

Conclusion-

Medical insurance, if opted correctly, can bring two benefits at the same time. However, with so many options available in the market, it is important to analyze every option according to the personal requirements. Also, while admitting the patient in case of medical emergency, ensure that the hospital is empanelled in the list of approved hospitals to claim cashless benefit from the Insurance Company.

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