Simplified Laws Guide to Taxation and Legal Concern 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.
