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For tax purpose – the coverage for Life Insurance and Mediclaim policy

This is a very confusing topic. The more you read, the more you get confused. So, to read less and to get less confused, go through this short note!

Life Insurance Premium

Coverage For tax benefit u/s 80C of Income Tax Act, Individual Taxpayer can pay life insurance premium to cover the life of –

  • Self
  • Spouse (husband or wife)
  • Any child (dependent/independent, male/female, minor/major or married/unmarried)

Payment Can be done by the taxpayer or any member of the family via cheque/dd/card or internet banking or cash.

Amount The premium paid up to a maximum of Rs.150000 per year can be claimed as deduction out of total income. There is no age limit for claiming tax benefit.

 

WHEREAS

 

For Mediclaim Insurance Premium

Coverage For tax benefit u/s 80D, Individual taxpayer can pay Mediclaim Insurance premium to cover –

  • Self
  • Spouse (husband or wife)
  • Dependent children
  • Parents

Payment by the taxpayer from his bank account via cheque/DD/Card or Internet banking (cash payment not allowed)

Amount The deduction towards premium depends on the age of the policy holder. If the policyholder is less than 60 years, he can claim up to Rs.15000 per year and if he is over 60 years, he can claim up to Rs.20000 per year. Additionally, if the policy is covered for parents, a further deduction of Rs.15000 is allowed and if the parents are over 60 years, instead of Rs.15000, one can claim Rs.20000 as deduction. So, unlike in LIC, Mediclaim premium paid is allowed based on the age of the policyholder as well as the age of parents.

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About CA Prasad Chartered Accountant

CA Prasad Chartered Accountant
CA Prasad is a practicing Chartered Accountant and partner in Bangalore -based CA Firm. For further information or query, please email it to [email protected]