Issue/Justification

Currently, deduction of mediclaim premium is allowed in the year in which the payment has been made.

There are many mediclaim policies available in the market for which a single premium is payable in year one but the policy cover is for more than one year. These policies are more economical compared to traditional yearly policies.

Suggestion

Pro-rata deduction of single premium paid in year one should be allowed over the term of the policy. E.g. if the premium paid is Rs. 42,000/- for a 3-year policy, Rs. 14,000/- should be allowed each year starting from the year in which the payment has been made

Source-  ICAI Pre-Budget Memorandum–2018 (Direct Taxes and International Tax)

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Category : Income Tax (28372)
Type : News (13996)
Tags : Budget (1957) Budget 2018 (401) ICAI (2755) Section 80D (62)

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