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claim received agnst mediclaim policy

Deepak Kumar (Chartered Accoountant) (270 Points)

10 March 2010

I had taken a medicalim insurance policy & claimed duduction u/s 80 D. Now I have received insurance claim from insurance co. Is it exempt/ taxable? Pls give answer with section

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13 Replies

llllVICTORllll (Internal Auditor) (511 Points)
Replied 10 March 2010

i think it will not be taxable , but sec 10(10D) talks only about life insurance on individuals but not medical insurance.. so even am waiting for a good answer

CA Dhiraj Ramchandani (CA, M. com) (10823 Points)
Replied 10 March 2010

Ok then, now in my view too...

It will not be taxable...

CA Anil Sah (Jr. Manager (F&A) PSU) (139 Points)
Replied 10 March 2010

In My Opnion :-

Such insurance claim Shall Be Exempt , beause section 10D State as follow :

[(10D) any sum received under a life insurance policy, including the sum allocated by way of bonus on such policy, other than—

(a) any sum received under sub-section (3) of section 80DD or sub-section (3) of section 80DDA*; or

(b) any sum received under a Keyman insurance policy; or

(c) any sum received under an insurance policy issued on or after the 1st day of April, 2003 in respect of which the premium payable for any of the years during the term of the policy exceeds twenty per cent of the actual capital sum assured:

Provided that the provisions of this sub-clause shall not apply to any sum received on the death of a person:

Provided further that for the purpose of calculating the actual capital sum assured under this sub-clause, effect shall be given to the ⁸²[Explanation to sub-section (3) of section 80C or the Explanation to sub-section (2A) of section 88, as the case may be].

Explanation.—For the purposes of this clause, “Keyman insurance policy” means a life insurance policy taken by a person on the life of another person who is or was the employee of the first-mentioned person or is or was connected in any manner whatsoever with the business of the first-mentioned person;]

in above clearly mentioned that any sum received from 80DD or 80DDA will not subject to deduction , but 80D not includ in exclusive list of said not deduction .

sivaram (Asst Mgr-Taxation) (6918 Points)
Replied 10 March 2010

exempt from tax

Balaji (Knowledge Seeker) (317 Points)
Replied 11 March 2010

Dear Deepak,

The amount you've received from the Insurance company is in settlement of the medical expenses that you've already incurred,i.e, it is in the nature of a re-imbursement of the expenses.Hence,in my view, there is no element of income in the claim thet you've recd from the company and thus should be tax-free.Of course, I would love to hear from our more experienced and learned friends in the Forum.

CA SUDIPTA SINHA (Commerce Coaching- Accounts Cost FM) (735 Points)
Replied 11 March 2010

Yes, Balaji is right. Claim received from the insurance co. is not income hence not taxable.

Aditya Maheshwari (CA in Practice) (35867 Points)
Replied 11 March 2010

Yes Balaji is right that insurance claim is received against some expenses incurred which are generally more the claim amount. So no tax payable on the same as there is no income received.

C.Balaji (Learner) (1867 Points)
Replied 11 March 2010

Not taxable..............exempt from tax.........agree........

CA Ashwani Gaur (Partner) (21 Points)
Replied 11 February 2011

Dear All

Mediclaim received is not taxable because it doesn't fall under any of the five heads of income I.e.

1. Income under the head salary.

2. Income under the head HP.

3. Income under the Head PGBP.

4. Income under the head Capital Gains.

5. Income under the head Income from other sources.

Parvinder Uppal (DM - Accounts & Finance) (21 Points)
Replied 27 July 2011

Dear Deepak Ji,

The amount you have received from the Insurance company is in the settlement of the medical expenses that you have already incurred. So, it becomes the nature of a re-imbursement of the expenses. Hence, it is tax-free.

But on other hands if you claimed more then what you actualy expended, excess of actual expenses is purly taxable.

Best Wishes.

Gaurav (Own Business) (151 Points)
Replied 12 August 2013

Don't worry. It wouldn't be taxble under 80D.

Cutiepie..:))) (Executive) (89 Points)
Replied 23 January 2016

I m not understanding why u ppl are mixing Medical insurance premium and medical allowance? Medical Allowance will be exempt only if reimbursement amount is received i.e. upto Rs.15000.But what about the amount of premium received contributed under section 80D what will be d consequences of the same.Coz medical allowance is just the tentative amount received by the employee and getting reimbursement only on production of the bills.What about the premium paid under section 80D of the income Tax Act?