Tuesday, January 24, 2012

DEDUCTION U/S 80D MEDICLAIM POLICY (HEALTH POLICY) PREVENTIVE HEALTH CHECK UP


on Tuesday, January 24, 2012

Deduction under section 80D is available for medical claim policy By individual for family and HUF for their members . Other details regarding 80D and medical insurance there under is given below
  1. Addition to section 80 C:Section 80D is available other than 100000 deduction available under 80C for life insurance,ppf,gpf,tuition fee,ULIP,House loan repayment etc.
  2. Insurer covered:This deduction is available for medical claim policy which should be framed in this behalf by
    • by GIC(General insurance Corporation) or by
    • any other insurer but approved by IRDA(Insurance Regulatory Development authority)
  3. Available to :Deduction is available to 
    • Individual (resident or non resident ,Indian Citizen or foreign citizen)
    • HUF(Hindu undivided Family may be resident or non resident)
  4. Mode of payment:Insurance Premium should be paid by any mode other than by Cash .Means if insurance premium is paid by cash then deduction is NOT available.Before Assessment year 2008-09 ,only payment by cheque was allowed under this section but from Ay  2008-09 onwards the deduction is allowed by other mode also like online payment which is now a days is very popular or by credit card is also allowed.
  5. Out of Income :The amount should be paid out of the income chargeable to tax.
  6. Proposer of the policy is not must:The premium is to be paid to effect or keep inforce insurance policy  ,there is no condition that assessee should be the proposer of the policy ,
  7. Partly contribution: Assessee can  partly contribute the premium amount but amount should be paid directly to insurance company and paid through mode other than by cash (see example)
  8. Insurance cover on?:First deduction given below :Insurance Premium may be paid for medical claim insurance policy for assessee himself or spouse or dependent children or any combination of three.
  9. Addition for parents:Second deduction given below:Insurance premium may be paid for medical claim insurance for assessee parents (father or mother or for both)(whether depended or not)
  10. Deduction upto 40000:Theoretically ,maximum deduction can be claimed for Rs 40000.(detail as given below)
  11. Deduction of Preventive health checkup :A sub limit of 5000/- has been allowed wef financial year 2012-13 for preventive health check up for self ,spouse and dependent children and parents whether dependent on assessee or not.Preventive health check up amount  can be paid through any mode including cash mode(read more about preventive health check up u/s 80D up to 5000/-)
Amount Of deduction  : Two type of Deductions are available to Individuals under this section from  Assessment year 2009-10 onwards (also available in in current financial year 2012-13)

Sl. No.
Persons for whom payment made
Nature of payment
Mode of payment
Allowable Deduction (in Rs.)
1
Employee or his family
    the whole of the amount paid to effect or to keep in force an insurance on the health of the employee or his family or
  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]
any mode other than cash








Cash mode is also allowed
Aggregate allowable is Rs. 15,000/{For Senior Citizens it is Rs. 20000/-}.
2
Parent or Parents of employee
(whether depended on assessee or not)
    the whole of the amount paid to effect or keep in force an insurance on the health of the parent or parents of the employee or
    any payment made on account of preventive health check-up of the parent or parents of the employee [restricted to Rs. 5000/-; cash payment allowed here]
any mode other than cash






Cash payment allowed
Aggregate allowable is Rs. 15,000/ than {For Senior cash Citizens it is Rs. 20000/-}


Deduction to HUF: Deduction to HUF is available on insurance premium paid for policy taken for  of any member of the  HUF

Addition deduction for Resident Senior Citizen:In addition to two point above,  additional deduction of Rs 5000 is available where assessee or his spouse (wife or husband) or dependent children and parents(whether depended or not) or any member of the family in case one and father or mother is a resident in India and a senior  citizen in case two.And same in the case of HUF assessee if policy  has been taken on member which is senior citizen than additional Rs 5000/- deduction is available also to HUF.

Senior citizen means who is at least of 65 year of age or more at any time during the previous year.
Update : Age Limit for Senior Citizen has been proposed to be reduced to 60 Year wef financial year 2012-13 through Finance Bill 2012

Example : An individual assessee pays (through any mode other than by cash) during the previous year medical insurance premium as under
  1. Rs 12000/- to keep in force an insurance policy on his health and on his wife and dependent children
  2. Rs 17000/- to keep in force an insurance policy on the health of his parents.
According to above provisions he will be allowed of Rs 27000/-(12000/- +15000/-) if neither of his parents is senior citizen .however if any of his parent is a resident senior citizen ,he will be allowed a deduction of 29000(12000+17000) .whether the parents is dependent or not is not a consideration for deciding the deduction under section 80D(from assessment year 2009-10 )(previous year 2008-09)

Further, in the above example ,if cost of insurance on the health of the parents is 30000/- out of which Rs 17000/- is paid (by any non cash mode) by the son and rs 13000/- by the father (who is senior citizen), out of their respective taxable income ,the son get the deduction of Rs 17000/- (in addition to deduction of Rs 12000/- for the medical insurance on self and family) and the father will get deduction under section Rs 13000/-
(Example as given in Finance Act 2008)

Deduction of Preventive health checkup :A sub limit of 5000/- has been allowed wef financial year 2012-13 for preventive health check up for self ,spouse and dependent children and parents(whether depended or not) .Preventive health check up amount  can be paid through any mode including cash mode(read more about preventive health check up u/s 80D up to 5000/-)

Hope it will be now easy to understand the section 80D deduction.

Related Topics,.
  1. Deduction u/s 80 C under who's name cab be done =
    1. Life insurace
    2. Tuition fess,
    3. House loaN repayment
  2. Deduction u/s 80DDA:Deduction for medical treatment
  3. Deduction u/s 80 E:Deduction for Higher Education
  4. Deduction u/s 80GG:Deduction for rent where no HRA received
  5. Exemption for HRA
  6. Exempted & Taxable allowances.

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  1. Suppose if the assessee is an employee and his employer coovers him and his spouse under group medical insurance and the amount is borne by the employer directly and then The employer has given an offer/option to the employee/s that they will cover for medical insurance their dependent parents also if the employee pays additional medical insurance premium ie., the employee pays additional premium to the employer and the employer in turn pays the premium to the insurance company covering the dependent parents, whether this medical insurance paid to the employee is eligible for deduction u/s 80 D or not?
    t.adinaryana@yahoo.com

    ReplyDelete
  2. I am having a Floater mediclame Policy covering (Myself, Spouse, daughter & Parents (Senior citizen)),for which I am paying a premium of Rs 23000/-. How much deduction can I clame US 80D.

    ReplyDelete
  3. Dear Anoy

    In my opinion you should get 23000/- as deduction u/s 80D. However you should take separate policy for your parents in future

    ReplyDelete
  4. i taken royal sundaram mediclaim policy for 2 years for myself husband and daughter. mode of payment paid directly from my credit card. credit card payment made by me. i am not taking tax benefit for the pemium. can my husband can take the benefit of premium paid

    ReplyDelete
    Replies
    1. Dear Swash,

      It can only be claimed by a person who has paid. In your case you have paid the premium so your husband can not claim the benefit

      Delete
  5. my taxable income from salary 35000 in a. y .2012-2013 if invest in mediclaim 6208/- for my self and my dependent then how mutch tds deduct frommy salary.
    Harshad Panchal
    my Email id harshad.panchal@gmail.com

    ReplyDelete
    Replies
    1. please give more details like salary component etc and other savings plus pls check salary value 35000 per month or 350000 per year?

      Delete
  6. Dear All,

    Kindly suggest me good mediclaim policy
    My father is undergoing dialysis twice in a week and medical expenses of 15000/- per month..

    Regards,
    Kishore

    ReplyDelete
  7. Hi
    I have Apollo Medicalim policy with an option to pay 2 Yr Premium. However Apoloo will issue only One Sec 80D cert stating that Cover is for 2 Yrs.
    Can I use the same 80D benefit divided in 2 equal Instalments in Two FY ie 2012-13 & 2013-14. Total premium for 2 Yrs is Rs 40,000. SO I will claim Max Rs 15000 every year.
    Pl clarify asap
    Thanks

    ReplyDelete
    Replies
    1. 80d deduction is available on payment basis ,if you paid two years premium in one year then yo can claim whole premium in the year in which amount has been paid .

      So in your case it is not advisable to pay premium for two year as you can claim 15000 maximum as against payment of 40000/-

      Delete
  8. If a person is having mediclaim policy for which he is paying Rs. 9000/- as permium P.A. Except this premium he spent Rs. 20000/- towards medical expenses. My question is - Is this Rs. 20000/- should be considered for his tax calculation? Pls guide

    ReplyDelete
    Replies
    1. u/s 80D Not at all . But deduction is available under preventive health check up maximum Rs 5000/-

      http://www.simpletaxindia.net/2012/03/deduction-on-preventive-health-check-up.html

      Delete
  9. The policy is in the name of my father since last 10 years. This year if the premium is paid from my account, then will the deduction u/s 80D be available to me or not?

    ReplyDelete
    Replies
    1. If it is a Health/Medi claim Policy then you are eligible u/s 80D

      Read more: http://www.simpletaxindia.net/2009/01/deduction-us-80d-mediclaim-policy.html#ixzz26Ku7KJPL

      Delete
  10. Hi
    I took an Oriental Insurance Policy under to cover my non dependent parents and my father paid for the premium from his bank account(online). Can my father claim the the Tax benefit under Section 80D? What all must he file along with his tax returns to claim the same

    ReplyDelete
    Replies
    1. yes , your father can claim deduction u/s 80D. As we have already metntioned that to claim deduction assessee there is no condition that assessee should be the proposer of the policy ,


      Delete
    2. Thank You for the prompt reply.
      I would like to know how to claim for the same? Does he only need to attach the policy document or should he attach a bank statement to prove the same?

      Delete
    3. if he is an employee and required to submit the proof then he may provide Insurance company premium payment receipt, and on the receipt he should certify that payment has been made by him.

      if required by ddo ,he can show bank statement also.

      further if he is not an employee then he can just to claim the deduction in his return ,nothing to be attached with income tax return

      Delete
  11. i've read the forum truly spking its useful and fast also.
    i've some doubts
    1. as many policies are giving options to buy policy for 2 yrs at a time at a cheaper rate than 2 yrs separately. so is the tax benefit certificate issued is applicable for 2yrs if i pay premium now for 2 yrs. example premium for 1 yr is 3422 and for 2 yrs it is 5963 pls advise
    2. is it possible to change the proposer's name once the insurer gets the job so that insurer can get tax benefit instead of present proposer.
    3. if the elder brother is proposer can he get tax benefit if not what's this HUF concept.
    i know u reply faster. thanx

    ReplyDelete
    Replies
    1. 1.Payment date is Important ,period of policy is not . Generally policy is taken for one year and in most of the cases period go beyond current financial year, but if premium is paid in a particular year it is allowed in the same financial year.so in our opinion total premium paid is allowed in the yr of payment .

      2.Proposer /beneficiary concept is for insurance company ,no relevance in Income Tax . Under Income Tax if you take pay a policy premium for eligible person then you are eligible to claim deduction ,no matter who so ever is the proposer.

      3. No ,you brother can not take benefit.
      HUF(Hindu Undivided Faily) is legal separate entity under income Tax.

      Delete
  12. This comment has been removed by the author.

    ReplyDelete
    Replies
    1. if Your premium is more than permissble limit or your next year income tax slabs are higher then it is advisable to bifurcate premium in two years.

      2. Proposer name change issue is not related to income tax only insurance company can tell you the rules.In income tax even one policy premium can be paid by two person and can claim benefit equal to payment made by them.

      Delete
    2. as i mentioned my premium for 1 yr will be 3422 and for 2 yrs payment option will be 5963. so i want to ask u sir if i go for this 2 yr Rs5963 option can i claim or use this certificate for 2 yrs i.e 12-13 and 13-14 yr OR only for this current 12-13 yr the entire amount.
      i think this time u will get me right.

      Delete
    3. if you pay premium for two year in in fy 2012-13 then you can claim the same in fy 2012-13 it self .

      so if you pay full amount of 3422+5963 in fy 2012-13 then full amount is admissible in fy 2012-13.

      Delete
  13. Hi,

    I took MaxBupa Medical Insurance. Premium amount is Rs.14150/- for (self, spouse, daughter). Also one more for my parents. Premium is Rs.20000/-. But bill was paid through fathers credit card and he is also an employee.

    Can I submit them under my name. My father won't submit them under his name since he had his LIC policies and housing loan.

    ReplyDelete
    Replies
    1. As payment has been made by your father , you can not claim the deduction for your father.

      To claim your father's premium insurance , premium must be paid by you.

      Delete
  14. Hi. I have paid mediclaim premium 7500/- in cash for my parents. Mediclaim policy is my father and mother name and my father is a senior citizen. Now can i get 80d tax benifit. My account dept told as my name is not there i cannot claim the benefit. Pls suggest.

    ReplyDelete
    Replies
    1. To claim the mediclaim policy premium you must have paid the premium through other than cash mode. You can claim premium of your father and mother but as you have paid the amount in cash you can not claim it . Even if such premium is regarding your own own policy and you have paid it in cash then also deduction is not available.

      Delete
  15. I take tax saver fixed deposit from Idbi bank for5 years on joint name. me and my husband . first applicant is my husband. i have salary account in idbi and also have child account under my guardian. authorised signatory of child ac is me only. I transferred the amount for tax saving FD from child account. please suggest tax benefit taken by whom? as husband is first holder he can take is correct but he not taken the benefit then can i take the tax benefit for that f.y. please sugges

    ReplyDelete
    Replies
    1. Why you have complicated the things , why you have not taken this on your name only and through your bank account .

      In our view you/your husband both can not claim this deduction . Your husband can not as he has not deposited it .

      and you can not claim as the FD is not on your name and fund are also being used fro child account.

      Delete
    2. thanks for reply,my querry is child is dependant so why i can not take the take benefit as it is on joint name

      Delete
  16. we can consider for exemption of the stamp duty while purchasing property what about vat and service tax can we claim for exemption.

    ReplyDelete
    Replies
    1. No deduction for VAT and Service Tax under income Tax act available

      Delete
  17. Can spouse claim deduction u/s.80 D if the policy in the name of her husband, her self and son?

    ReplyDelete
    Replies
    1. Yes ,she can , if she has paid the premium then she can claim the deduction.

      Delete
  18. the mediclaim policy is in the name of my father. the policy is a family plan. i am one of the beneficiaries of the plan. i have paid the whole amount of premium. can i claim the whole amount as deduction u/s 80d.kindly guide..

    ReplyDelete
  19. CAN BOTH FATHER AND SON CAN CLAIM A TOTAL DEDUCTION OF 30000 TO THE EXTENT OF INSURANCE AMOUNT PAID?
    SHOULD WE DEDUCT THE POLICY AMONT PAID TO INSURANCE COMPANY OR MAXIMUM DEDUCTION AVAILABLE?
    UPTO 5000 payment on account of preventive health check-up is allowed in cash then what about the remaining amount?

    ReplyDelete
    Replies
    1. please ask query with notional example or actual figures ,as you query is not clear.

      secondly payment of health insurance premium can be paid through any mode other than cash to claim deduction u/s 80D.

      Delete
  20. Hi, I have taken Oriental family floater policy (myself+wife+ dependent parents) of which i paid Rs.19000/- as premium. I have also taken two separate policy for parents of Rs.3500/- each. Can I get tax benefit of (19000+3500+3500) = 26,000/- ? Please advise.

    ReplyDelete
    Replies
    1. yes you can claim 26000/- . There is separate limit of 15000/20000/- for parents.

      Delete
  21. If a father pays mediclaim (from his bank account)which is in the name of his son,can the son claim deduction in his return?

    ReplyDelete
  22. if i have paid premium for 2 years can i claim it one year or it cna only be claimed in 2 years.

    In case i have taken a home loan and got insurance also for 5 years and under which paid premium for 5 years for mediclaim cover , can i spread the benfit over 5 years.

    ReplyDelete
    Replies
    1. It is to be claimed in the year of payment ,whether it relates to 2 years or more .Deduction will be available in the year of payment

      Delete
  23. i have a question.

    can a married daughter claim deduction for health policy taken on her parents.the premium amount will be borne by the daughter. the parents are self employed and are not dependent.
    kinly advise

    ReplyDelete
    Replies
    1. Yes , she can claim deduction u/s 80D even his parents are not dependent on her.

      Delete
  24. I recently bought a family first policy of maxbupa covering myself, father & mother. I have paid a total premium of INR 42000. Company has issued me premium receipt for INR 42000. Now my question is for how much tax rebate under section 80D am i eligible? (my father is 60+).

    Kindly help me.

    ReplyDelete
  25. I have superannuated from service recently and paid a sum of Rs. 60000/- for life long coverage of self and dependent to my Institute. Though it is q quasi government organisation it follows all norms of CGHS. Can I claim deduction under section 80 D for this sum?

    ReplyDelete