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Get your self a medical insurance and in return reduce your income tax liability. Various general insurance companies have come up with wide variety of health insurance products, and the Government of India, in order to support the cause, is providing tax benefits on health insurance premium paid by an individual for himself, his spouse, children and parents, and to Hindu Undivided Families (H.U.F.’s) for premium paid for health insurance of their members. This deduction is provided u/s 80D of the Income Tax Act, 1961, (“The Actâ€). Conditions for claiming deduction u/s 80D The deduction can be claimed on total income computed for calculation of income tax, of an amount paid as a premium for medical insurance if the following conditions are satisfied:
- Insurance premium is made to a general insurance company against a medical insurance (Mediclaim).
- Payment should be made by an individual, for himself or his family, or a Hindu Undivided Family (HUF), for its members.
- Payment is made by any mode, other than in cash.
For this purpose, family means spouse, parents and dependent children. Amount of deduction Deduction is allowed for the amount of premium paid, up to Rs. 15000 in case of self and dependent children, an additional Rs. 15000 is allowed for premium paid towards the medical insurance of parents. i.e. a total deduction of Rs. 30000 can be claimed towards medical insurance premium of self, children and parents. Further, in case any of the above is a senior citizen (Above 65 years), an additional deduction of Rs. 5000 shall be allowed towards premium payment of that senior citizens. i.e. in case of senior citizens the above limit of 15,000 shall be upgraded to Rs. 20, 000. For e.g. if A is 45 years of age and pays medical insurance premium of himself and his wife amounting to Rs. 20, 000, he also pays the premium of medical insurance of his parents amounting to Rs. 20, 000, he shall be allowed a total deduction of Rs. 35, 000 (15, 000/- self and wife + 20, 000/- for senior citizen parents). Similarly, deduction up to 15, 000 or 20, 000 as the case may be, can be claimed by a HUF towards payment of medical insurance premium of its members. Conclusion The Act is providing double bonanza to the health insured. A maximum benefit up to Rs. 40,000, can be claimed on premium payment towards health insurance. These benefits are in addition to the benefits a tax payer can avail under section 80C of the Act. We at Taxmantra.com aim to free you from all tax worries so that you can concentrate fully on your core expertise and optimise your career potential. We at Taxmantra.com provide full year support solving all your tax issues, in addition to filing of your return of income with excellent tax planning. Please join us now in pursuit of simplifying individual taxation! Team Taxmantra.com
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