Budget 2018 clarity on Mediclaim vs Medical Reimbursements

Finance Act 2018 brought many amendments in the field of Income tax although not big but minute affecting entire class of taxpayers. General Confusion which many of the clients and other professional colleagues are carrying after they heard the budget 2018 is that Government by budget 2018 had withdrawn the Mediclaim Policy deduction available u/s 80D.

Lets understand

Mediclaim Policy– 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 of which consequential limit for F.Y 18-19 has been increased to Rs. 50000 from Rs. 30000 for Senior citizens that 60 years and above. This deduction can be claimed by any taxpayer whether salaried or not.

Medical Reimbursements

Prior to budget 2018 medical reimbursements upto Rs.15000 p.a are tax free u/s sec 17(2) provided all medical bills are available. These medical reimbursements are provided by employer to their employees. This deduction is available only to a salaried class person where Employer Employee relation exist.

So this is the distinction between two.

Now what budget 2018 did is not the withdrawal of Mediclaim policy deduction u/s 80D but the Medical reimbursement deduction u/s 17(2).

in place of medical reimbursement & transportation allowance now straight standard deduction of Rs.40000 is allowed. which is more than previous years by Rs.5800. so don’t get Confused.

Categories: Income Tax

View Comments (3)

  • Hello Mam,
    Nice article but with a mistake.
    Senior citizen means who is of age 60 or above and not above 60 yrs.

    • Thanks Chirag I had written 60yrs & above not above than 60yrs. It means 60yrs r also senior citizens.
      I m not mam but sir although name confuses



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