Rs 5,000 relief on preventive healthcare

As per Section 80D of the Income Tax Act, 1961, a deduction up to Rs 5,000 for expenditure on a preventive health check-up is allowed. If I have incurred an expenditure of Rs 4,000 on getting my MRI scan done to diagnose the acuteness of my cervical problem, will it come under a preventive check-up? — Shalini

The word ‘preventive’ has not been defined by the Act. The Oxford dictionary defines the word ‘preventive’ as “designed to prevent something”. So, in case, an MRI scan has been advised by the doctor to prevent a disease, it may be possible to claim a deduction in respect of expenditure incurred for preventive healthcare check-up.  However, according to your query, a MRI report has been obtained to diagnose acuteness of the cervical problem.  In my opinion, the expenditure incurred by you may not fall within the term “preventive health check-up”. 

I, a retired employee of the Bank of India, am covered under a Bank of India retirees Mediclaim policy, which offers hospitalisation benefit of up to Rs 3 lakh to me and my wife. It is a group insurance scheme cover under United India Insurance Company Limited. As per rules, Rs 12,020 was deducted as insurance premium from my pension S/B A/c on October 20, 2016 and Rs 7,000 was reimbursed on February 22, 2017. What is the amount of the deduction under Section 80D? — Yash Paul Sharma

The amount of allowable deduction under Section 80D of the Income Tax Act 1961 (The Act) should be Rs 5,020 (Rs 12,020 – Rs 7,000).

I, a senior citizen of 68 years, have been getting Rs 18,245 as disability pension (basic pension Rs 14,015, disability element Rs 1,755, and DR Rs 2,475) with effect from January 1, 2016. I am also receiving Rs 21,118 as civil pension. I am paying Rs 3,924 half yearly towards a LIC policy and have deposited Rs 1,50,000 in an EPF account.  

My tax consultant has informed me that only disability element of the pension to the tune of Rs 1,755 is deductible. Similarly, EPF of Rs 1,00,000 + LIC premium of Rs 7,848 is admissible for a deduction, instead of Rs 1,50,000 deposited in the EPF account. Is my consultant right? What is the amount of the allowable deduction? — Santa Singh

Your queries are replied hereunder:-

a) According to letter No. F.No.200/51/99-ITA-I dated May 6, 2000, by Under Secretary to The Govt. of India, Ministry of Finance, Department of Revenue, Central Board of Direct Taxes, New Delhi, addressed to Director (Pens), Govt. of India, Ministry of Defence, Department of Defence, New Delhi, it has been clarified that the entire disability pension --- disability element and service element--- is not chargeable to income tax.

b) It seems you have wrongly mentioned the term “Employees Provident Fund” as a retired employee cannot contribute to Employees Provident Fund.  The deposit must have made by you in a Public Provident Fund to the extent of Rs 1,50,000.  A total deduction of Rs 1,50,000 is allowable under Section 80C and therefore, the admissible amount would be restricted to Rs 1,50,000, if the deposit has been made in a public provident account.