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How to Claim your Medical Insurance Premium u/s. 80D ?

9:16 AM Dharmen No comments

DEDUCTION IN RESPECT OF MEDICAL INSURANCE PREMIA SEC 80D

If the following conditions are satisfied then an assessee may claim deduction under this section.

The taxpayer is an individual or a Hindu undivided family.
Insurance premium is paid by the taxpayer in accordance with the scheme framed in this behalf by the General Insurance Corporation of India and approved by the Central Government. The scheme is known as “mediclaim” insurance policy. (The amount deposited in a similar scheme of any other insurer who is approved by the Insurance Regulatory and Development Authority shall also be eligible for deduction).
The aforesaid premium is paid by cheque.
Mediclaim policy is taken on the health of the taxpayer, on the health of spouse, dependent parents or dependent children of the taxpayer. In case of HUF on the health of any member of the family.

HEALTH POLICY ANALYSIS

Note: If the mode of the payment is not given, then make an assumption that premium is paid by cheque out of taxable income

PROBLEM

Sri "X" submitted the following particulars under section 80(d) Medical Insurance premium:

Self: 10,000____Father(age 69 years): 24000

Solution

For self:

Least of the two amounts: 10,000

For father:

Least of the two amounts: 20,000

TOTAL: 30,000

Medical Allowance Rs. 100/- p.m. grant to Central Government Pensioners.

4:34 AM Dharmen

Implementation of Government's decision on the recommendations of 5th Central Pay Commission - Grant of Fixed Medical Allowance @ Rs.100/- p.m. to Central Government pensioners residing in areas not covered under CGHS.

Clarification orders issued by the Department of Pensioners Portal today on its official portal regarding the FMA to Central Government pensioners residing in areas not covered under CGHS...

No.4/25/2008-P&PW (D)

Government Of India

Ministry Of Personnel, Public Grievances & Pensions

Department Of Pension & Pensioners Welfare

Lok Nayak Bhavan, Khan Market,

New Delhi, dated the 2nd May, 2014

OFFICE MEMORANDUM

Subject: Implementation of Government's decision on the recommendations of 5th Central Pay Commission - Grant of Fixed Medical Allowance @ Rs.100/- p.m. to Central Government pensioners residing in areas not covered under CGHS.

The undersigned is directed to say that instructions for grant of Fixed Medical Allowance of Rs. 100/- per month to Pensioners/Family Pensioners residing in areas not covered under CGHS were issued vide this Department's O.M.No.45/57/97-P&PW(C) dated 19.12.1997, 24.08.1998, 30.12.1998 and 17.04.2000. Instructions were issued vide this Department's O.M. No. 4/25/2008 P&PW(D) dated 26.05.2010 for enhancement of the amount of Fixed Medical Allowance from Rs. 100/- to Rs. 300/- p.m. w.e.f. 1.9.2008.

2. It may take some time in completion of formalities and process for sanction of family pension after death of existing pensioner/family pensioner. Representations have been received in this Department that, the Fixed Medical Allowance to the subsequent family pensioner is allowed by some departments/organizations from the date of authorization of Family Pension. In such cases, the family pensioner does not receive the Fixed Medical Allowance for the period from the date of eligibility till the date of authorization of family pension.

3. The matter has been examined in this Department. It is clarified that in cases where the existing pensioner/family pensioner was in receipt of Fixed Medical Allowance, the family pensioner next-in-line may be allowed Fixed Medical Allowance from the same date from which he becomes eligible for family pension, if he/she otherwise fulfils the conditions for grant of Fixed Medical Allowance.

sd/-

(Deepa Anand)

Under Secretary to the Govt. of India

Source : http://pensionersportal.gov.in/

Medical facilities for in-patient treatment and post-operative follow-up treatment to ECHS beneficiaries residing in districts not covered by ECHS.

11:09 AM Dharmen

No. 22D (09)12013/US (WE)/D (Res)

Govornment of India

Deptt of Ex-Servicemen Welfare

Ministry of Defence

New Delhi

Dated the 21st August, 2013

The Chief of the Army Staff

The Chief of the Naval Staff

The Chief of the Air Staff

Subject:- Medical facilities for in-patient treatment and post-operative follow-up treatment to ECHS beneficiaries residing in districts not covered by ECHS.

Sir.

1, The undersigned is directed to invite attention to Govt. of India, Ministry of Defence letter No. 24(48)/03/US(WE)D(Res) dated 19th December, 2003 and to state that keeping in view, the difficulties being faced by the ECHS beneficiaries residing in districts not covered by ECHS it has now been decided to liberalise the ECHS Rules as follows to enable them to avail medical facilities for in-patient treatment and post- operative follow-up treatment-

(a) (i) ECHS beneficiaries who are holding a valid ECHS Card and are residing in districts not covered by ECHS shall be eligible to obtain treatment from Govt. (Central/State/Local Self Government) hospitals and submit the medical re-imbursement claim to the ECHS Polyclinic (i.e. they can avail the treatment without obtaining referral from Polyclinic located outside their district),

(ii) Re-imbursement shall be limited to the CGHS rates applicable to the nearest ECHS Polyclinic and as per the ceiling rates and ward entitlements or as per actuals whichever is lower.

(b) (i) ECHS beneficiaries who are holding a valid ECHS card and are residing in districts not covered by ECHS shall be eligible to obtain post¬operative follow-up treatment from Govt. (Central/State/Local Self Government) hospitals in follow up cases of Renal Transplant Surgery Knee and Hip Joint Replacement, Cancer Treatment Neuro Surgery and Cardiac Surgery. However, prior permission (referral) is to be obtained from the OIC of nearest ECHS Polyclinic.

(ii) Permission shall be issued for 3 to 6 months at a time and may be extended based on medical requirement. Reimbursement for consultation, procedures and investigations shall be limited to CGHS rates applicable to the nearest ECHS polyclinic and as per the ceiling rates and ward entitlements or as per actuals ,whichever may be lower. OPD medicines shall be obtained from the concerned Polyclinic for a maximum period of 3 months at a time.

2. These order will come into effect from date of issue.

3. This issues with the concurrence of MoD (Finance) vide U.O. 1574/13/Fin/Pen dated 11th July, 2013.

Yours faithfully,

sd/-

( HK Mallick)

Under Secretary to the Govt. of India

Source: http://www.desw.gov.in

Medical reimbursement, Medical Allowance and Tax Exemption Claim.

7:50 AM Dharmen

Government Employee for their annual Medical Check-up or major/minor Injury paid Medical Bills and after that they claim as Medical reimbursement to Government. When the claim was passed by the Government, Employee got benefit of it. In this regard Government has said they would no longer have to pay income tax on money drawn from welfare funds for annual medical check-ups. The Central Board of Direct Taxes (CBDT) has issued a notification in this regard. As per the notification, no income tax will be levied “to meet the cost of annual medical tests or medical check-ups of the member, his spouse and dependent children” if money is drawn from the welfare fund to meet the expenses.

Medical allowance :
According to I-T Act, any allowance received by an employee is fully taxable unless specifically exempted. Thus, allowance per se is taxable in all cases, except those specifically exempted. For instance: HRA (house rent allowance) is exempt up to the extent specified in Section 10(13A). Monthly allowance is not specifically exempted so it is added to the salary as a perquisite and fully taxable.

‘Medical allowance’ is a fixed allowance paid every month to employees irrespective of the fact whether they submit the supporting bills or not. ‘Medical reimbursement’ is a payment made to employees against medical bills produced by them subject to their entitlement. The maximum tax benefit available is Rs. 15,000 per annum. Under this head, one may avail for reduction in the taxable income for a maximum of or up to Rs. 15,000 for medical expenses during each financial year.

Medical reimbursement :
Reimbursement by an employer of medical expenses incurred by an employee is generally tax-free. Where an employee is allowed to get reimbursement for the medical expenses incurred by him or his family members, the entire amount of reimbursement is tax-free and is not treated as a taxable perquisite. For medical reimbursement, Rs 15,000 is the maximum tax break that an individual can avail of against original bills. This exemption is given to the employee only if the medical expense is actually incurred on his medical treatment or his family members—who are dependent on him. Family members include spouse, children, parents, brother or sister of the employee.

If person is not providing medical bills and are taking medical allowance, the entire amount would be taxable. After verification of bills employer reimburses employee, subject to pre-decided limits. Medical reimbursement up to Rs. 15,000 p.a. is exempt from Income Tax.

Medical reimbursement comes under Section 80D, where the maximum limit is Rs. 15,000 per annum. These bills usually have to be submitted on or before January 30 to your office. If you had not paid the bill then 30% of Rs. 15,000 will be considered as a taxable amount. But while you are filing the tax return, that time you can show the bills as an exception and claim the 30%.

Remember, it is the employer’s responsibility to pay medical reimbursement only against authentic bills to claim exemption from Income Tax. This reimbursement is open to audit and scrutiny by both tax auditors and I-T Department.

Process to claim tax benefit on your medical expenses is -
Awareness –

Know the various income tax sections available to claim tax benefits on your medical expenses
Documentation –

Keep records of your medical expense, like medical bills, doctor prescription, etc
Benefit Period –

Medical expenses tax exemption are on financial year basis. That is your tax exemptions need to be claimed within the financial year in which your medical expenses occurred. Medical expenses cannot be carried forward to subsequent financial year for claiming tax exemptions in subsequent financial year
Expense Reporting –

Submit all your medical expenses data and documents to your company payroll or CA before end of financial year. So that your exemptions for tax savings is accommodated in your taxation before the end of financial year. Do not wait till end of financial year, and then try to claim tax refund from Income Tax Department. As getting tax refund is tedious and takes its own time running into months to years

1. The fixed medical allowance given to an employee is taxable.

2. Medical reimbursement done to an employee by an employer is not taxable in the hands of an employee, if treatment of the employee or his family member is done in any of the following hospitals:

Hospital maintained by an Employer
Hospital maintained by Central Government or State Government or Local Authorities
Hospital approved by Government for its employees
For certain prescribed diseases/ailment, hospital approved by the Chief Commissioner of Income Tax.

The reimbursement in (a) to (d) shall be tax free without any upper ceiling or cap.

3. In respect of reimbursement of medical expenses reimbursement done to an employee for treatment in any hospital other than those covered in (a) to (d) above, there is a maximum cap of Rs. 15,000/-.

With above basic idea the reply of the queries are as under:

In general, Medical reimbursement up to Rs. 15,000/- is tax free. There is no bar of having an allopathic treatment only for claiming an exemption. Exemption can also be claimed for Homeopathic Medical treatment.
Fixed medical allowance is taxable. Subject to maximum cap of Rs. 15,000/-, reimbursement of medical expenses supported by bills / vouchers are exempt from income tax.

Exemption of Medical Benefits on Treatment in Hospital to Taxpayer.

9:34 PM Dharmen

⁷⁷[Exemption of medical benefits from perquisite value in respect of medical treatment of prescribed diseases or ailments in hospitals approved by the Chief Commissioner.

3A. (1) ⁷⁸[In granting approval to any hospital other than a hospital for Indian system of medicine and homoeopathic treatment for the purposes of sub-clause (b) of clause (ii) of the proviso to sub-clause (vi) of clause (2) of section 17], the Chief Commissioner shall satisfy himself that the hospital is registered with the local authority and fulfils the following requirements, namely :—

(i) The building used for the hospital complies with the municipal bye-laws in force.

(ii) The rooms are well ventilated, lighted and are kept in clean and hygienic conditions.

(iii) At least ten iron spring beds are provided for patients.

(iv) At least one properly equipped operation theatre is provided, with minimum floor space of 180 square feet and with a separate sterilisation room.

(v) At least one labour room is provided, with minimum floor space of 180 square feet, in case the hospital provides medical service for maternity cases.

(vi) Aseptic conditions are maintained in the operation theatre and the labour room.

(vii) A duty room is provided for the nursing staff on duty.

(viii) Adequate space for storage of medicines, food articles, equipments, etc., is provided.

(ix) The water used in the hospital or nursing home is fit for drinking.

(x) Adequate arrangements are made for isolating septic and infectious patients.

(xi) The hospital is provided with and maintains :—

(a) high pressure sterilizer and instrument sterilizer;

(b) oxygen cylinders and necessary attachments for giving oxygen;

(d) a pathological laboratory for testing of blood, urine and stool;

(e) electro-cardiogram monitoring system;

(f) stand-by generator for use in case of power failure.

(xii) There is at least one qualified doctor available on duty round the clock for every twenty beds or fraction thereof.

(xiii) In hospitals providing intensive care unit facilities, there are at least two qualified doctors available on duty round the clock exclusively for such intensive care unit.

(xiv) One nurse is on duty round the clock for every five beds or a fraction thereof.

(xv) In hospitals providing intensive care unit facilities, there are at least four nurses provided exclusively for every four beds or fraction thereof for such intensive care unit.

(xvi) The hospital maintains record of health of every patient containing information about the patient's name, address, occupation, sex, age, date of admission, date of discharge, diagnosis of disease and treatment undertaken.

⁷⁹[(1A) In granting approval to any hospital for Indian system of medicine and homoeopathic treatment for the purposes of sub-clause (b) of clause (ii) of the proviso to sub-clause (vi) of clause (2) of section 17, the Chief Commissioner shall satisfy himself that the hospital fulfils the conditions specified vide Office Memorandum dated the 6th June, 2002⁸⁰, by the Department of Indian Systems of Medicine and Homoeopathy, Ministry of Health and Family Welfare for approval of private hospitals for Indian system of medicine and homoeopathic treatment to Central Government Health Scheme beneficiaries and Central Government employees.]

(2) For the purpose of sub-clause (b) of clause (ii) of the proviso to ⁸¹[sub-clause (vi) of] clause (2) of section 17, the prescribed diseases or ailments shall be the following, namely :—

(a) cancer;

(b) tuberculosis;

(d) disease or ailment of the heart, blood, lymph glands, bone marrow, respiratory system, central nervous system, urinary system, liver, gall bladder, digestive system, endocrine glands or the skin, requiring surgical operation;

(e) ailment or disease of the eye, ear, nose or throat, requiring surgical operation;

(f) fracture in any part of the skeletal system or dislocation of vertebrae requiring surgical operation or orthopaedic treatment;

(g) gynaecological or obstetric ailment or disease requiring surgical operation, caesarean operation or laperoscopic intervention;

(h) ailment or disease of the organs mentioned at (d), requiring medical treatment in a hospital for at least three continuous days;

(i) gynaecological or obstetric ailment or disease requiring medical treatment in a hospital for at least three continuous days;

(j) burn injuries requiring medical treatment in a hospital for at least three continuous days;

(k) mental disorder - neurotic or psychotic - requiring medical treatment in a hospital for at least three continuous days;

(l) drug addiction requiring medical treatment in a hospital for at least seven continuous days;

(m) anaphylectic shocks including insulin shocks, drug reactions and other allergic manifestations requiring medical treatment in a hospital for at least three continuous days.

Explanation : For the purpose of this rule,—

(a) "qualified doctor" means a person who holds a degree recognised by the Medical Council of India and is registered by the Medical Council of any State;

(b) "nurse" means a person who holds a certificate of a recognised Nursing Council and is registered under any law for the registration of nurses;

(c) "surgical operation" includes treatment by modern methodology such as angioplasty, dialysis, lithotropsy, laser or cryo-surgery.]

Revised Pay Structure of Medical Officer in Commissionorate of Employees State Insurance Scheme.

8:41 AM Dharmen

REVISED PAY STRUCTURE OF MEDICAL OFFICER

Maharashtra Government has issued a resolution on 29th May, 2013 for revised pay structur of Medical Officer in Commissionorate of Employee state insurance scheme vide G.R.No. Vepur/1212/Pra.Kra./20/Sudharna-5/Seva-9. Before this resolutions Medical Officer is in Pay Structur 9300-34800 Pay grade Rs. 5400 and after this resolution revised pay structure 15600-39100 with Grade Pay 5400 w.e.f. 04.11.2009.

Read Full Government Resolution of Revised Pay Structure of Medical Officer

New Medical Insurance Scheme by State Governments u/s. 80D w.e.f. 01.04.2014.

8:55 AM Dharmen

The previous provisions of section 80D, inter alia, provide that the whole of the amount paid in the previous year out of the income chargeable to tax of the assessee, being an individual, to effect or to keep in force an insurance on his health or the health of the family or any contribution made towards the Central Government Health Scheme (CGHS) or any payment made on account of preventive health check-up of the assessee or his family, as does not exceed in the aggregate fifteen thousand rupees, is allowed to be deducted in computing the total income of the assessee.

It has been noticed that there are other health schemes of the Central and State Governments, which are similar to the CGHS but no deduction for such schemes is available to the subscribers of such schemes. In order to bring such schemes at par with the CGHS, it is proposed to amend section 80D, so as to allow the benefit of deduction under this section within the said limit, in respect of any payment or contribution made by the assessee to such other health scheme as may be notified by the Central Government.

This amendment will take effect from 1st April, 2014 and will, accordingly, apply in relation to the assessment year 2014-15 and subsequent assessment years.

In section 80D of the Income-tax Act, in sub-section (2), in clause (a), after the words “Central Government Health Scheme”, the words “or such other scheme as may be notified by the Central Government in this behalf” shall be inserted with effect from the 1st day of April, 2014.

The Co-operative Banks (Nomination) Rules, 1985 - Clarifications

9:37 PM Dharmen

The Co-operative Banks (Nomination) Rules, 1985 - Clarifications

As you are aware, the Co-operative Banks (Nomination) Rules, 1985 have been framed in exercise of powers conferred under Section 52, read with Sections 45-ZA, 45-ZC, 45- ZE and 56 of the Banking Regulation Act, 1949 (10 of 1949). The nomination forms for bank deposits (Form No.DA1, DA2, and DA3), articles in safe custody (Form No.SC1, SC2, SC3) and safety lockers (Form No. SL1, SL1A, SL2, SL3 and SL3A) have also been prescribed in the Nomination Rules. These forms, inter alia prescribe that the thumb impression of the account holder is required to be attested by two witnesses.

2. In this regard, we clarify that for the various Forms (DA1, DA2, and DA3 for Bank Deposits, Forms SC1, SC2 and SC3 for articles in safe custody and Forms SL1, SL1A, SL2, SL3 and SL3A for Safety Lockers) prescribed under the Co-operative Banks (Nomination) Rules, 1985 only Thumb-impression(s) shall be attested by two witnesses. The signatures of the account holders need not be attested by witnesses.

3. Banks are advised to ensure strict compliance of the instructions as per the clarification given above.

Deductions of Medical Treatment etc. u/s. 80DDB for Asstt. Year 2013-14.

2:59 PM Dharmen

Section 80DDB allows a deduction in case of employee, who is resident in India, during the previous year, actually paid any amount for the medical treatment of such disease or ailment as may be specified in the rules HDD (1) (see Annexure) for himself or a dependant. The deduction allowed is equal to the amount actually paid or Rs. 40,000 whichever is less. Further the amount paid should also be reduced by the amount received if any under insurance from an insurerer or reimbursed by an employer. In case of a senior citizen (an individual resident in India who is of the age of sixty years or more at any time during the relevant previous year) the amount of deduction allowed is Rs. 60,000/-.

DDO must ensure that the employee furnishes a certificate in Form 10-I from a neurologist, an oncologist, a urologist, nephrologist, a haematologist, an immunologist or such other specialist, as mentioned in proviso rule 11(2) of the Rules.

For the purpose of this section in the case of an employee "dependant" means individual, the spouse, children, parents, brothers and sisters of the individual or any of them,

How to claim Vehicle Maintenance and House Cleaning Reimbursement?

8:46 AM Dharmen

Vehicle Maintenance reimbursement:

(a) Use of any vehicle provided by the employer to an employee for journey by him from his residence to office or from office to his residence shall not be chargeable to tax.

(b) Where the car is owned by the employee or employer and maintenance & running expenses including driver salary, are met by the employer and if the car is used wholly for official purposes, no value shall be taken as perquisite provided :

i. The employer has maintained complete details of the journey undertaken for official purposes;

ii. The employer gives a certificate that the expenditure was incurred wholly for official duties.

Section 10(14) includes only those allowances which are not in the nature of perquisite within the meaning of section 17(2). Vehicle maintenance reimbursement falls within the purview of section 17(2). Hence, this exemption is not available to the employees claiming vehicle reimbursement for official purposes. Conveyance allowance to the extent of Rs 800/- p.m. or Rs. 1600 p.m (for a blind person) is allowable to all employees other than those claiming Vehicle reimbursement to meet the expenditure for the purpose of commuting between place of residence and place of office.

House Cleaning reimbursement:

The value of benefit to the employee (or any member of the household), shall be the actual cost to the employer as reduced by the amount if any recovered from the employee. If a domestic servant is engaged by the employee, the perquisite is taxable in the hands of all employees (Whether specified or not). If a domestic servant is engaged by the employer, the perquisite is taxable in the hands of only specified employees. If Domestic Servant allowance is given to the employee, it is chargeable to tax as perquisite even if the allowance is used for engaging a domestic servant.

Exemption of medical benefits from perquisite value in respect of medical treatment of prescribed diseases or ailments in hospitals.

8:55 AM Dharmen No comments

As per Income Tax Rules the Exemption of Medical benefits from perquisite value in respect of medical treatment of prescribed diseases or ailments in hospitals approved by the Chief Commissioner are as under: