I-T to allow mediclaim payment through credit card
March, 12th 2007
The Income Tax department would allow payment of mediclaim premium through credit card, debit card or any other electronic mode eligible for deduction for tax purposes once the Finance Bill 2007 is passed.
The Finance Bill 2007 once passed, will bring necessary modifications in the Income Tax laws to include payment of health insurance premium eligible for deduction from the total income.
Currently, the practice is that deduction can be claimed if the premium is paid either by cheque or cash. But, with rapid use of plastic money and online banking, the ministry felt it was necessary to include these modes of payment for claiming deduction.
Union Finance minister in his recent budget proposed to amend the provisions of Sec 80D and clause (IB) and sub-section (1) of section 36 to provide that payment of premium made in any mode other than cash shall be eligible for deduction.
This modification would pave way to allow deduction for payments made through electronic mode like credit cards. The budget also proposed to raise the limit of deduction to Rs 15,000 from Rs 10,000 and for senior citizens the limit as revised to Rs 20,000 per annum.