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Life becomes easier when you know you have a proper, secure plan for your future. When you decide to invest in an efficient health insurance scheme which offers you and your family an easy way out of some unforeseen incidents then you should that’s one less hassle that you don’t have to worry about.
We at Policy Bazaar like to be able to help our customers in the same way. We like to provide them with good, helpful insurance schemes all at one spot, so that you can easily compare and decide which one would suit and your family the best.
The following Mediclaim deductions are ones that come under the section 80D of the Income Tax Act. This will definitely be helpful to you in cases where you need to save up on Income Tax. The deductions will vary in every individual’s case but some of the rules here are applicable to all and thus it is necessary that one is well aware of them.
1. Overview of Deduction U/s. 80D for Medical Insurance/Expenses:
One of the highlights of the Mediclaim Insurance Deductions for the current year is that one can claim deductions on Income Tax up to an amount of Rs.25000 per year when one needs to do so when paying premiums for medical insurance in the form of installments.
The premium that one would pay can be only for either himself or herself, their spouse, or any dependent children. But if in case either the person or his spouse is a senior citizen then the amount that will be deducted goes up to Rs.30000.
HUFs or Hindu United Families are also eligible to claim tax benefits for themselves and their families under the deductions under Section 80D for ay 2016-17 but there is an upper limit to this rule where the total tax deductions cannot go beyond Rs.30000.
Any treatments done outside the country can also be valid for tax benefits but this is possible only if your health insurance policy allows you to do so and the company offering you the policy must be registered under the Insurance Regulatory Authority of India.
One can also avail tax benefits on more than one insurance policy but one must make sure that all the eligibility criteria must be fulfilled and all the premiums for the respective health insurance policies must be paid for.
2. Deduction under Section 80D for Preventive Health Check-ups
There is a provision under this section for health check-ups where one can claim a tax deduction annually. Apart from the limit as mentioned above of Rs.25000 or Rs.30000 one can also claim tax deductions for expenses in cases of preventive health check-ups of Rs.5000 per budgetary year.
But the premiums that are paid for health insurance which are availed by siblings will not qualify for any deductions in income taxes.
3. Section 80D deduction on Health Insurance Premium paid for parents and senior citizen health insurance
The medical insurance premium that is paid for guardians qualifies for deductions up to an amount of Rs.25000 every year and if either your mother or father is a senior citizen then the limit for deductions increases by Rs.5000 and becomes Rs.30000 and this additional amount can be useful for annual preventive health check-ups. This is the mediclaim insurance exemption u/s 80D for senior citizen.
All these tax benefit are only applicable on payments made through online banking transactions, or cheques, debit or credit cards or drafts. The deductions cannot be claimed on any cash payment made for premium payments. But the money paid in installments for the health check-ups can be paid for in cash.
4. Limit on various Tax deductions under the Section 80D:
According to the Income Tax Act Section 80D, one can avail income tax benefits on health insurance premiums paid for oneself and his or her family and this is different form the benefits which are based on expenses in relation to health check-ups.
The following table gives you a detailed account as to how the tax deductions work and this information and more is available on our website.
Limit on Exemption(In rupees)
Exemptions on Preventive Health Check-ups(In rupees)
Self and one’s family
Self and one’s family including parents
25,000 + 25,000 = 50,000
Self and one’s family plus senior citizen parents
25,000 + 30,000 = 55,000
Self as a senior citizen with family plus senior citizen parents
30,000 + 30,000 = 60,000
5. Health Insurance premium deductions for very senior citizens:
Super senior citizens are those who are 80 years or above. If they do not have a valid insurance policy, then they can avail a tax deduction of Rs.30000 for every financial year for medical health check-ups and any treatments. This benefit cannot be claimed for your own benefit. In cases where your father is a super senior citizen but your mother is a senior citizen then you can claim a tax benefit of Rs.30000 for medical check-ups and treatments for guardians and registration and medical coverage for both guardians.
6. Deductions in cases of Treatment of some Specified Illnesses under Section 80D DB:
- In cases of some particular illnesses like cancer or Parkinson’s, or chronic renal disease you can get tax benefits up to an amount of Rs.140000 and Rs.60000 for senior citizens and Rs.80000 in case of super senior citizens towards any medical expenses and treatment for the same.
- The entire list of specified diseases is given in the Rule 11DD of the Income Tax Act. One would need to put along an endorsement from the specialist one is consulting while filing of the oncome tax forms.
- This can be claimed for oneself, one’s spouse, guardians, siblings or children.
7. Deductions in cases of Treatment of a dependent with a disability under the Section 80DD deduction for ay 2016-17 and Deduction under Section 80U:
One can claim benefits of up to Rs.75000 for any expenses in cases of nursing or medical treatment, training, preservation or rehabilitation of a dependent with any form of disability. The amount becomes Rs.125000 for severe or extreme disabilities. The reliant can be anybody including parents, spouse, children, or even siblings. A medical certificate which supports your claim is a definite requirement.
More on this is available in the Section 80D of the Income Tax Act. Section 80U states that any disabled person can avail benefits of Rs.75000 and the limit goes up to Rs.125000 lakhs with no relation to the expenses which come under treatment.
8. Deductions in cases of Medical Allowances under the Section 17:
The amount paid towards any treatment expenses for family including self, spouse, dependent parents, children or siblings from your salary paid by the employer will be excluded from income tax payments and amount limit will be Rs.15000 per year. The amount paid with your own compensation by your manager for the expenses incurred towards treatment of family like oneself, parents, children, partner, any dependent guardians or siblings shall be excluded up to an amount of Rs.15000 from the pay expense for every fiscal year.
9. Deductions according to Section 80D and 80C:
Section 80C offers tax benefits up to an amount of Rs.150000 per annum while Section 80D proposes deductions up to a sum of Rs.65000. Another point to keep in mind is that the former involves investments made in the form of small savings schemes, mutual funds, life insurance premium payments, etc. while the latter is in regards to deductions involving health insurance premium payments alone.
Basic differences between 80C and 80D deductions:
- Under the Section 80D one can avail tax benefits for payment of health insurance premiums which are incurred in the form of health check-ups but Section 80C allows you to avail tax benefits on many other types of investments as well.
- The maximum tax benefit one can avail will be up to a limit of Rs150000 under Section 80C and Rs.65000 under Section 80D.
Exclusions under the Section 80D in the Income Tax Act:
- In order to get tax deductions only the tax payer must pay the health insurance premiums and no third party must get involved.
- The premium if paid in cash will not be eligible for any tax benefits.
- Any service tax or cess charges which are levied on the premium payment are not eligible for any tax benefits. The service tax that is payable on payments of health insurance premiums is 14%.
- Group Health Insurance policies will not be liable for any tax benefits under the Section 80D. But if the group decides to make extra payments in the form of premiums to enhance their cover then they can claim tax benefits for the extra money they pay towards the group cover.
Thus this overview of the Mediclaim Deductions for the annual year 2016-17 will give you a fair idea about the same and you can learn much more on our company website.
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