Mediclaim, Section 80D and your tax saving

Do you know that buying mediclaim can also help you save taxes? Do you know what is the maximum amount that you can invest in mediclaim and claim deduction for it? Also, is the amount used to buy mediclaim included in the Rs 1,00,000 limit set under Section 80C? 

Do you know that apart from Section 80C investments you can also use Section 80D to save taxes?

In a chat with readers on August 7, Get Ahead tax expert Mahesh Padmanabhan discussed these and other tax-related issues affecting the taxpayers.

For those of you who missed the chat, here is the transcript.

Part I: How to save taxes beyond Section 80C

RAGHAVANPVV asked, Which Income Tax return should the retired persons (having income from FD interest/dividends) fill up?

Mahesh Padmanabhan answers, In your case, you would be needed to use ITR 2.

Arunachalam asked, My date of Birth is 07-09-1943. From which financial year year i can get Sr ctzn benefit and how much? For the present how much will i get? Arunachalam,Hospet.

Mahesh Padmanabhan answers, You would be treated as a senior citizen from FY 2008-09 onwards. For the moment the threshold limit for zero tax status would be Rs. 1.1 Lakh of taxable income.

vinodkarat asked, Sir, Vinod Karat here..I have a mediclaim which has an annual premium of around Rs 5,000. Does this also comes under the Rs 1 lac investment limit or is it separate? Your advice will be highly appreciated.

Mahesh Padmanabhan answers, This is considered as deduction separately under section 80D and accordingly is out of Rs. 1 Lakh limit under section 80C.

avinash asked, I am getting salaried income of Rs 3.5 lakhs per year and also I am making variable income through business. Is there any way to show business losses as tax saving?

Mahesh Padmanabhan answers, Business loss cannot be set off against salary and accordingly you would need to pay the requisite tax on your salary income and carry forward the business loss to future years and set off such loss against future taxable profits.

Shankar asked, Sir, For Tax Saving, which is the best scheme/MFund? Whether one should go for SIP or for lumpsum deposit?

Mahesh Padmanabhan answers, SIP is the best method of investment that eliminates the risk of losing your one time investment in case of a drop in the stock market.

prachi asked, Is there any change in the deductions for Medical Insurance u/s 80D, Housing loan & interest, deduction of Rs 1 lakh u/s 80C for 2007-08 & what is the change?

Mahesh Padmanabhan answers, Section 80D dealing with deduction for premium paid for medical insurance has envisaged a higher deduction of Rs. 15,000 and Rs. 20,000 (in case of any family member being a senior citizen).

tejabhai asked, Seems by mistake i filed, unsigned ITR form to IT Dept.What should I do now?

Mahesh Padmanabhan answers, This would be treated as defective return and would be liable to be treated as invalid by the assessing officer. You could refile your return (of course with your signature) immediately.

B asked, Sir,My husband is getting Rs 3.6 lacs PA and he owns 2 offices , which we have given on rent . Rent comes around Rs 1.08 lacs PA. I am also working and I am getting Rs 3.25 lacs PA. What should be our investment policy? We both are not entitled for any EPF or gratuity. We will not get anything after retirement. So we want to invest in such a way that our tax should be saved as well as good amount of money we will get at our retirement age. Please suggest. Thank you.
Mahesh Padmanabhan answers, You could invest in the following investment options; PPF, ULIP, Medical insurance, Life insurance, ELSS. You would need to consult a financial planner to arrive upon the correct investment mix to secure you retired life.

Mahesh Padmanabhan says, Time to leave folks, would catch up with you in the next session. Thanks and have a nice day

Part I: How to save taxes beyond Section 80C