Money won’t create success, the freedom to make it will.’
The quote rightly explains the purpose of money; it is not money itself but the means to make it that should bring satisfaction and the sense of achievement to a person. How will one be able to justify his achievements in life, if the means to make money is for him to be trapped behind closed walls, sitting in front of a desktop, working on meaningless excel sheets that display someone else’s progress?
The world is out there to take your money, the moment you take one step out of your house, everything changes. You pay money for transport, for food, for using your mobile services, the list just goes on. What the common man does not realize though is. What he pays most for are simply taxes.
The difference between Mediclaim Insurance allowance and reimbursement
Now unlike house rent allowance which is exempted only to the extent specified under section 10 (13A) it may or may not be taxable. But the same cannot be said about medical allowances. Medical allowances included as a component of an employee’s salary is very much taxable.
Now reimbursement, on the other hand, happens on the medical expenses actually incurred by the employee for himself or his immediate family. The range of reimbursement can differ from anywhere in between Rs.15,000 to Rs.20,000 in the case of a senior citizen. To know, even more, check out the 80dd deduction for ay 2016-17 or 80d deduction for ay 2017-18.
Understanding the difference in between allowance and reimbursement, you will now get the concept of a mediclaim Insurance Policy much more clearly. We at PolicyBazaar ensure that you get the best deals when it comes to choosing the policy. We give you a free consultation on how you can utilise your resources to the fullest in order to make smart investment decisions that will benefit you in the years to come. Do not hesitate to contact our representatives or us at any given point.
Below listed are some of the features of a mediclaim, to know more about the policy details and get a detailed list of benefits
Features of a mediclaim insurance policy
Age of entry
The premium of a policy is strictly based on age. Basically the older you are, the dearer your premium will be
The mediclaim is available for anyone who is a taxpayer, his parents, dependent children and even HUF (Hindu United Family)
For a child, the policy can be obtained anytime after he or she is three months old till the child grows until 25 years of age for a man, but in the case of women, till the time they don’t get married
Minimum sum insured has to be at least Rs.50,000/-
The premium normally stays constant till the age of 35 years and then increases with a slab of every ten years of age difference
Mediclaim is also available for senior citizens, 80 years or more for any given time relevant during the previous year
In the case of senior citizens, the policy has to be applied for at least five years before they turn 80. Post which they can go on to renew it even after they are 90
Post which the sum insured can go up in multiples of Rs.25,000/- all the way up till Rs.5 lakhs
We at PolicyBazaar believe in suggesting that you maintain a decent amount of sum insured just so that in the case of a medical emergency you will not have to run here and there to find methods to make money. In today’s date treatments are not cheap, and hospital bills can go very high, very very fast.
|You may also like to Read: Section 80D of income Tax|
Awareness... Awareness of the elements around us and within us
Yes, awareness about our rights, the ways we can exempt ourselves from taxes, save money, instead of sending it down the drain. While there are many ways to save taxes and exempt yourself from paying a whole lot of unwanted money, it's important to constantly research and keep oneself updated in order to get a clear idea as to how and when you can make use of your financial power.
Let’s consider tax exemptions for instance. One can qualify for tax exemptions in many different ways, by showcasing the interest of the money spent on home loans, rent, LIC premiums, tax- saving or equity mutual funds which have a tax clause attached to them, then finally there are best health insurance and medical reimbursements.
Medical reimbursements or mediclaim are ways to get the money back that we would have otherwise spent on our health and health related matters. There are also limits to how much we may be able to exempt ourselves from, read on to find out more regarding, Mediclaim exemption limit ay 2016-17.
Tax deduction on medical Insurance Premium
- The deduction is mainly of 2 types, basic and additional deduction. Under Basic deduction, the cover is applicable for yourself, your spouse and your children. Until now it was Rs.15,000/- but the amount has gone up to Rs. 25,000/- for next year.
- The second type of deduction is additional deduction which is the premium paid for your parents, that also amounts to Rs.15,000/- till now and post this year will go up to Rs.25,000/-.
- In the case of senior citizens, the deduction amount was Rs.20,000/- and has gone up to Rs.30,000/- for next year.
|You may like to Read: 80C Tax Deduction|
5 Final things to keep in mind while buying a premium
- While buying a premium, purchase a very basic one, but just ensure that it covers each and every expense that you will incur in the case that you are hospitalized. Things such as medicines, surgical equipment, equipment required during surgery, post-hospitalization visit charges and finally, tests and X-ray charges as well.
- As per your budget browse through multiple policies that you have at your disposal, approach a consultant or contact us at Policy Bazaar and our representative will guide you to make the right decision.
- Whatever happens, the transaction made for the premium amount cannot be in cash, for record purposes. It has to be some kind of documented transaction, most preferably check or online transfers.
- You cannot claim a tax deduction in case you are paying for your Brother or Sister; there is a way around. Do not make the payment from your account. Take the policy for Brother or Sister in your Hindu Undivided Family (HUF) file. In the case of a floater policy, don’t add their name to the policy. Instead, ensure that the premium payment is made by HUF. This will ensure tax deduction.
- You cannot claim tax deductions for the premium paid for your in-laws. But instead, your wife can pay the premium from her taxable income and claim for health-related benefits on her salary.
- Ensure that you do not include the service tax amount in the deduction. Only the Premium paid is eligible for income tax deduction.
- When you take cover for your children, in case they are above 18 years, or they are on the job, you cannot claim on their behalf. They will have to claim the tax benefits for themselves.
Hence these were some easy ways to go about knowing your mediclaim exemption. You can always search online and read up articles and related posts such as rule 11dd, section 80d of income tax act 1961,80ddb deduction for ay 2016-17 or deduction u/s 80c for ay 2016-17.
We suggest you to ensure that you make a smart choice when you are choosing your health insurance in order to make the most of your tax benefits. There are some rules such as Rule 11d that are related, allow us to help you understand the same in a much better manner.
As mentioned earlier you can also avail benefits under rent provisions, housing loans and mutual funds. Do not forget to consult a specialist who will guide you in order to give you a better idea as to how to go about investing in these policies that will prove beneficial for you and your family.
At Policy Bazaar we not only shall provide you health related insurances but also will give you suggestions as to how you can go about purchasing other types of insurances such as a car, travel, life, etc.
Taxes on this, taxes on that, road tax, service tax, VAT, Svach Bharat Tax, etc. The government is penalising the common man for everything that they are doing, for having dinner, for driving, for travelling, for taking loans, for spending on our health and even for earning on a day to day basis!
Yes, it's funny we are paying taxes for taking home our salary. Many countries in this world have made salaries tax free, many countries have stopped penalising the citizens for making money and instead have found other sources to make their income.
Now that we live in a country that does tax us for whatever we do, what is our weapon to fight it back?
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