As we all are aware that Finance Act, 2018 brought major amendment in the field of Medical Reimbursement Allowance and Mediclaim. Since these both the amendments are enforce together in India, there are some confusion which many of the clients and other professional colleagues are carrying after they heard the budget 2018 and the confusion is, whether the deduction under section 80D is also removed alongwith Medical reimbursement allowance?
Lets us understand
It is an Health insurance which provide security as and when we face health issue, the treatment cost will be afford by the insurer company if our ailment is covered under the mediclaim policy. further the amount of cover is also decided upto which insurer will afford at the time entering the policy.
The deduction for the policy is available u/s 80D. The quantum of deduction is as under:
As per an amendment in the Budget 2018, tax exemption on medical reimbursement amounting to Rs. 15,000 and transport allowance amounting to Rs. 19,200 in a financial year have been replaced with a standard deduction of Rs. 40,000 (For FY 2018-19) and Rs. 50,000 (For FY 2019-20).
So what budget 2018 did is not the withdrawal of deduction u/s 80D for Mediclaim policy but the removal of Medical reimbursement allowance u/s 17(2).
(Republished with Amendments)