FAQ on Mediclaim deduction under section 80D

1.    Why is deduction u/s 80D allowed?
The deduction is allowed for

1. buying medical insurance , popularly known as Mediclaim policy.
2. Keeping in effect a medical insurance already bought.



2. How much deduction available?

1. If Mediclaim is bought for any person other than person having 65 years , then Rs 15,000.
2. If Mediclaim is for person having 65 years or more , Rs 20,000.

3. Who can claim deduction?
Individual and HUF making payments for medical insurance.

1. Individual can claim for self, wife, children and parents.
2. HUf can claim for Mediclaim policy on members.

4. What should be mode of payment of insurance premium?
Any mode other than cash will make one eligible for deduction u/s 80D.

5. If office deducts salary for medical insurance for employee and his family , whether the employee can claim deduction u/s 80D?

Yes, for the fact that
the mode of payment is any ,other than cash, and
It is employee who paid for himself or his family's insurance.

Get a certificate from the employer regarding deduction of amount for medical insurance purpose.You can claim to the extent the dedcution has been made by the employer for medical insurance subject to maximum RS 15,000  The amount of premium paid should form part of salary.

6.If an individual buys Mediclaim for himself and for his parents exceeding 65 years, how much can he claim as deduction?

Good question. Subsection 2 of section provides as under

(2) Where the assessee is an individual, the sum referred to in sub-section (1) shall be the aggregate of the following, namely:

(a) the whole of the amount paid to effect or to keep in force an insurance on the health of the assessee or his family as does not exceed in the aggregate fifteen thousand rupees; and
(b) the whole of the amount paid to effect or to keep in force an insurance on the health of the parent or parents of the assessee as does not exceed in the aggregate fifteen thousand rupees.

It is clear that an individual can claim deduction up to Rs 35,000 for medicalim insurance , if he makes insurance for his family and any parents exceeding 65 years.

7. Can somebody having invested the amount from income exempt from tax or by taking loan , claim deduction u/s 80 D?

No as per opening line in the section 80D , the payment should be only out of income chargeable to tax . Read the opening line :

80D. (1) In computing the total income of an assessee, being an individual or a Hindu undivided family, there shall be deducted such sum, as specified in sub-section (2) or sub-section (3), payment of which is made by any mode, other than cash, in the previous year out of his income chargeable to tax.

8. Can you get deduction u/s 80D for Overseas Mediclaim policy?

Yes, in author opinion , there in nothing in the provision u/s 80D which prohibits claim of deduction u/s 80D for medical insurance for overseas journey. The only requirement, as given in section 80D(5) is that the insurancecompanies issuing such overseas insurance should be one of these 

(5) The insurance referred to in this section 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 (Nationalisation) 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).