TAX STIMULUS FOR MEDICAL INSURANCE
Section 80D allows deduction of Rs.15,000 for covering insurance for own family & additional Rs.15,000 for premium paid for parents
Medical Insurance is becoming increasingly popular in India with the increasing cost of medical treatment and hospitalization expenses. The benefit of having a medical insurance is that by making a small payment of insurance premium, the proposer can cover the cost of medical treatment and hospitalization of himself and his family members in case of need.
Section 80D of the Income-tax Act provides for deduction out of the gross total income of the taxpayer in respect of such medical insurance premium paid. The popular medical insurance policy offered by the General Insurance Corporation of India is the ‘Mediclaim Policy.’ Several private insurance companies recognized by the Insurance Regulatory & Development Authority (IRDA) also offer a variety of medical insurance products, the premium payment of which is eligible for deduction under Section 80D. (more…)
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Housing Interest evokes Evergreen Interest!
Deduct Now, Pay Later, But Save Tax For Sure!
Deduction of interest on housing loan has been of evergreen interest for readers since it provide focus on valuable opportunities for income-tax saving. Replies to the following queries provide an interesting insight.
Tax Axe To Chop Charities Too!
Religion & Politics Sheltered As Taxman’s Holy Cow!
Complex Provisions To Perplex Charities
New Jargon – Fresh Norms
- Charitable trust to bear the new identity of ‘Non-Profit Organisation (NPO).’
- Charitable purpose replaced by the new phrase ‘permitted welfare activity (PWA).’
- Fresh procedure for NPO registration to be undertaken by all charities.
- Different & elaborate norms for computing gross receipts and outgoings.
- Current benefits of accumulation of income, upto 15% for an indefinite period, and upto any amount for five years, not available under DTC.
- Deduction at specified rates (mostly 50%) to be allowed to donors of eligible NPOs.
15% Tax on eligible NPOs – 30% Tax on other Charities
- No more tax exemption for income of charities. Even current basic exemption upto Rs.1,60,000 not applicable under DTC.
- Taxable surplus of all eligible NPOs (fulfilling as many as 14 prescribed conditions) to be taxed at flat 15%.
- All other trusts, though doing charitable work, to attract flat 30% tax on their income as an AOP.
Several Current Charities may not qualify as eligible NPOs
- Specific community trusts and associations for benefit of their members, though currently eligible for exemptions as charities, not eligible to be registered as NPOs under DTC.
- Where any business (not incidental to PWA) is held under the charity, even though its business income is applied only for PWA.
