RSS

Section 80D – Deduction in respect of for health insurance premia paid, etc.

09 Dec

Section 80D provides for deduction available for health insurance premia paid, etc. which is calculated as under:

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

Aggregate allowable is Rs. 15,000/{For Senior Citizens it is Rs. 20000/-}.

2

Parent or Parents of employee

  ♦  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

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

Here

(i) “family” means the spouse and dependent children of the employee.

(ii) Senior citizen” means an individual resident in India who is of the age of sixty years {For AY 2013-14 onwards] or more at any time during the relevant previous year.

The DDO must ensure that the medical insurance referred to above shall be in accordance with a scheme made in this behalf by-

(a) the General Insurance Corporation of India formed under section 9 of the General Insurance Business (Nationalization) Act, 1972 (57 of 1972) and approved by the Central Government in this behalf; or

(b) any other insurer and approved by the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999(41 of 1999).

Meaning:

Section 80D in Respect to Health Insurance Premiums

Investments made towards payment of health insurance premiums, qualify for a tax deduction under section 80D.

Available Deduction – For individuals less than 65 years of age, amount of health insurance premium paid or Rs. 15,000, whichever is lesser. For senior citizens above 65 years, amount of health insurance premium paid or Rs. 20,000, whichever is lesser.

A further deduction of Rs 15,000 could be claimed, for buying health insurance policy for your parents (Rs 20,000 if either of your parents is a senior citizen). This is irrespective of whether they’re dependent on you or not. No deductions can be claimed for in-laws.

Scope of Deduction – Individual assesses can claim deduction for premiums paid towards health insurance of self, spouse, parents and children.

For HUF assesses, premium paid for insuring the health of any member of the HUF, can be used for deduction.

Key Factors to keep in mind

  1. The premium may be paid by any mode of payment, other than cash.
  2. The health insurance premium that you pay must be from the taxable income applicable for the year you claim. Premiums should not be from gifts received by you.
  3. Part payment of premium is allowed. For example, suppose your parents contribute 50% of their health insurance premium and you pay the balance 50% of their premium. In such a case, you could avail the deduction for the amount contributed by you and your parents too could avail deduction for their contribution.

Ref: http://www.simpletaxindia.net/2012/10/how-to-calculate-tds-tax-on-salary-fy.html#ixzz2EOi4LIun

http://investmentyogi.com/taxes/tax-benefits-under-section-80d-80dd-and-80ddb.aspx

 

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Posted by on December 9, 2012 in TDS

 

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