Health Insurance under Sec.80-D of Indian income tax law


Deduction under Sec.80D-Health Insurance

Under Indian income tax law, deduction under 80 D is available for any mediclaim policy taken by individual for famly and HUF for their members. It is in addition to Sec.80C of One lakh.

Deduction is allowed under two heads:

1. Deduction on Medical insurance premium paid for himself,spouse,dependent children upto Rs 15000 maximum.

2. Deduction on Medical insurance premium paid for parents ,whether dependent on assesee or not upto Rs 15000 maximum.

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 parents 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. Senior citizen means who is at least of 60 year of age or more at any time during the previous year. So if anyone in the tax brackets of 30% takes mediclaim policy for his nuclear family for Rs.15000 and for his parents Rs. 20000 in which one of his parent is more than 60 years, he will get the following benefits: Rs.15000 in full for his nuclear family Rs.20000 in full for his parents. So the tax advantage he will get is Rs.10500 and in fact, he spends only Rs.25000 or so.

Unfortunately from next year 2012-13, proposed new tax code allows under Sec.80C, an amount of Rs. 3 lakhs which is as follows: a. upto Rs.1,00,000on Pension, PF and Gratuity funds( superannuation schemes including new pension scheme of Govt).

b. Upto 50,000 for expenditure on tuition fees, pure insurance premium on life and health cover including parents.

c. Up to 1.5 lakh for interest paid on housing loan.

This is gross injustice to salaried people and senior citizens. Trade unions and others should raise their voice against this tactical move by finance ministry and enhance the limit under b from Rs.50000 to 200000 separately. The limit under a is also little and it has to be enhanced to Rs.200000 atleast.

C.R. Venkata Ramani

(AICWA)

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