From the past few years, expenditure incurred on healthcare has been on the rise, encompassing expenses on preventive medical check-ups, medical insurance, etc. Income-tax Act, 1961 (the Act) provides certain tax deductions for an individual in respect of such expenditure happened on self or dependents, which have been discussed in this article. Medical claim/Health insurance premium For individuals, deduction is allowed for premium paid under a medical insurance policy covering his/her own health or his/her family’s (i.e., spouse and dependent children) up to Rs 25,000 per year. Further, an individual can claim a deduction for the premium paid under a medical insurance policy covering his/her parent or parents up to Rs 25,000 per year.
“In case the individual, spouse or dependent parents are resident senior citizens (i.e., of the age 60 years or more), then the aforesaid deduction limit is enhanced to Rs 50,000 per year. Expenditure incurred on preventive health check-up of up to Rs 5,000 per year for self and family and/or parents, respectively can also be claimed as a deduction. This deduction is irrespective of the individual’s age and within the overall limits mentioned above.“
In the case of a salaried employee individual, it is possible that medical insurance coverage is possible by providing the employer (either by way of direct payment under a medical insurance policy with the insurance company for the employee or reimbursement of such premium to the employee for the coverage of the employee and his/her family). Such premiums paid/reimbursed by the employer are tax-free perquisites for the employee. The employee may also opt for a expensive coverage, upon being given a choice by the employer, by paying a top-up premium at his/her own expense. Such premium would be eligible for a deduction under Section 80D of the Act. The employer have to consider such a deduction while deducting tax at source (TDS) on taxable salary.
Many health insurance policyholders will have a doubt about their covers that fall short when they met any medical expenses as they are excluded. For instance, long term diseases are excluded from coverage. This apart, policyholders and their dependents have to pay for their minimum commute as well as food, from of their pockets, while […]
Life insurance policy can do many benefits as more than just give you an insurance cover. This insurance policy are very helpful to get loans to an individual. In early May 2020,The rates at which loans can be taken have been revised.Loans against the policy ‘Jeevan Shikhar’ are available at the 9%,Which can be said […]
LIC’s Group Credit Life Insurance is a non–linked, non-participating single premium group term insurance plan. This plan offers an insurance cover on death of the group member during the policy term. The amount of insurance cover i.e. sum assured shall depend on the loan amount, rate of interest, moratorium period, if any, and nature of […]