sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
News Headlines »
 How to submit Form 15H, Form 15G to avoid TDS on interest income
 What is tax deducted at source (TDS)?
 Income Tax Return filing 2018: Here are some important tips for you
 Change in Examination Venue in Thane, Zone – II, May 2018 Examinations
 Here’s all you need to know New Income Tax return for salaried class available on IT portal
 What to do if you missed the (second) tax deadline
 Income-tax (5th Amendment) Rules, 2018 - Notification under section 9A (3) of the Income-tax Act, 1961 in respect of Fund Manager Regime
 Income Tax department warns salaried class again filing wrong ITRs
 ITR-1 form for AY 18-19 now available for e-filing
 New Income Tax Return Form for Salaried Class available in Portal
 Income Tax Return: ITR-1 ready for e-filing, says I-T department

Tax benefits of medical insurance
February, 20th 2009

The average life span of an individual has increased in India due to better health conditions, awareness about ones well being and improved medical facilities. At the same time, the medical costs of treatment and surgery have increased a lot. Therefore, medical insurance makes complete sense, especially where majority of the family members are dependent on one or two earning members, as is generally the case in an average Indian household.

It is a well-known fact that one can save tax up to Rs 1 lakh u/s 80C of the Income Tax Act, 1961. Likewise, payment made for medical insurance u/s 80D of the Act can also help save tax.

As per section 80D of the Act, a deduction can be claimed by an individual in respect of the medical insurance premium paid up to Rs 15,000 for himself and his spouse and dependent children. Additionally, he can also claim deduction for the medical insurance premium up to Rs 15,000 for his parent(s). Further, the aforesaid deductions are increased up to Rs 20,000 in case the premium is paid for senior citizen (65 years or more).

Computation of benefit

Let us understand the above with the help of an example. Ashish has taken two insurance policies, one for himself, spouse and dependent children and the other one for his dependent parents who are senior citizens. He pays an annual premium of Rs 12,000 & Rs 25,000, respectively, for these two policies. Now, lets determine the amount of exemption available to Ashish u/s 80D for each insurance policy separately.

In the first case, he will be eligible to claim a deduction of only up to Rs 12,000 i.e. amount of premium actually paid subject to a maximum of Rs 15,000. In the second case, where he has taken a policy for his parents, he would be eligible to claim a deduction towards the premium paid for Rs 20,000, which is the maximum limit. In total, he would be able to claim deduction of up to Rs 32,000 (i.e. Rs 12,000 + Rs 20,000) in respect of both the policies.

It is important to note that the medical insurance premium should not be paid by cash, to avail the tax benefit.

Dependent with a disability

Further, in case an individual incurs expenses on medical treatment of a dependent with a disability, then he can claim a deduction up to Rs 50,000 / Rs 75,000, subject to the disability of the dependent u/s 80DD of the Act.

An individual can claim a deduction up to Rs 40,000 (Rs 60,000 in case of senior citizens) u/s 80 DDB for expenses incurred on treatment of certain prescribed diseases or ailments, subject to fulfillment of conditions prescribed under the Act.

An integral part of overall investment planning

Medical insurance these days is becoming a necessity and one should look at it as an essential investment for the well being of self and family.

These days, many insurance companies provide cashless medical claim facility wherein an individual can get the treatment done in specified hospitals without any payment. The payment for the treatment is made directly to the hospital by the insurance company, subject to the terms and conditions of the medical insurance policy.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Company Overview

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions