Mediclaim

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Sujal Shah

Sujal Shah (Querist)
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21 May 2011 Whether Service Tax paid on Mediclaim is eligible for deduction under 80D???

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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21 May 2011 No service tax part is not eligible for deduction u/s 80D.

Sujal Shah

Sujal Shah (Querist)
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22 May 2011 R u sure???
bcoz when i asked the same question in Discussion forum everyone had asked me to consider the amount inclusive of tax.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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22 May 2011 It is a debatable issue. Act is not specific on this. I have seen the service tax portion being disallowed while representing for a case. But have seen many claim the service tax amount as deduction and get away with it.

Sec. 80D allows deduction for medical insurance premia as defined under Sec. 80D(5). A stricter view would mean that only the premium for such policy would qualify for deduction. Further, service tax is levied on the service provider, who is authorised to collect the same from the person, who avails himself of the service. It follows that it is optional for the insurer to absorb the service tax itself out of its profits or to charge the same separately or to include it as part of the premium by making such service tax a component of the premium charged. It is only where it is included as part of premium without a separate charge, it would non-controversially be deductible under Sec. 80D.

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Aditya Maheshwari

Aditya Maheshwari (Expert)
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22 May 2011 A certificate is issued by the company issuing mediclaim and it mentions only the premium amount and not the service tax part. So service tax element not allowable as deduction.

However in practical life most of the times they claim full amount and at the time of scrutiny if any only premium amount is allowable.

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