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Deduction’s available for Mediclaim

Monday, April 18, 2011

Anand Tibrewala
is a CA and Senior Partner at the leading Chartered Accountancy firm, AD & Company

I have contributed Rs. 22,800/- during the last financial year towards Mediclaim policies for myself as well as my family members. Kindly, let me know what is the deduction available for Mediclaim us/ 80 – D? Is any rider also for higher deduction?
— Sandeep Sharma, Churchgate

Usually a deduction of Rs. 15,000/- is available under section 80 – D of the Income Tax Act. This deduction is available for Mediclaim premium paid on the life of self, spouse, dependent children or dependent parents. However, if any member has attained the age of 65 during the financial year then a higher deduction up to Rs. 20,000/- is allowed.

During the last financial year I have earned a salary of Rs. 7,20,000/-. I have paid Rs. 1,20,000/- for LIC Premium, PF Contribution and Infrastructure Bonds. I have paid Rs. 16,240/- towards Mediclaim Insurance. I was compelled to pay Rs. 10,000/- to chief Minister Relief Fund. Besides the above I have paid Rs. 1,00,000/- for construction of a hospital in my native place. The hospital trust is registered with Income Tax Department u/s 80 – G. Advice whether I can get full deduction of Rs. 1,00,000/- paid towards donation to the hospital?
— Sunil Salvi, Bandra

 Your taxable income before deduction us/ 80 – G towards donation to hospital is Rs. 5,75,000/- i.e. Rs. 7,20,000 less Rs. 1,20,000/- towards LIC Premium etc, less Rs. 15,000/- Mediclaim Premium and Rs. 10,000/- towards contribution to Chief Minister Relief Fund. As per section 80 – G the overall limit for donation deduction is 10% of Taxable income after deduction under all other provisions but before deduction of Donation u/s 80 – G. Hence, your eligible amount us/s 80 – G would be Rs. 57,500/- i.e. 10% of Rs. 5,75,000/-. Thus you will not get the entire benefit of Rs. 1,00,000/- paid towards donation.

I am seriously disable since my birth. I have to take care of myself and spent substantial sum for my treatment on a regular basis. Is any deduction/rebate available to me for spending on my treatment?
— Raj Malhotra, Mahim

An Indian Resident individual is eligible for a deduction u/s 80 – U for amount spent on his own treatment. The disability needs to be certified by a prescribed Medical Authority. After Certification the copy of certificate need to be attached along with the return of income. This certificate needs to be attached every year. The amount which can be deducted is Rs. 50,000 per annum. However, if you are certified to be a person with severe disability then the deduction would be Rs. 1,00,000/-.

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