Section 80D of the Income Tax Act of 1961 provides for a deduction to Individuals and HUFs in respect of payment of medical or health insurance premium for family, parents, etc., during the previous year.
Eligible Taxpayers
Individuals (resident/ non-resident) and HUF taxpayers can claim deduction for health insurance premium, preventive health checkups and expenditure on medical treatment under Section 80D.
Eligible Expenditure & Limit
A. Individuals
The limit for deductions available to individual taxpayers in respect of payment of medical insurance premium, preventive health checkups and expenditure for medical treatment under section 80D includes,-
i) Payments for assessee (self) or the family (spouse/children): Rs 25,000. However, this limit is Rs 50,000 if any of them is of the age of senior/very senior citizen.
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ii) Payments for Parent(s): Rs 25,000. However, this limit is Rs 50,000 if any of the parents is of the age of senior/very senior citizen.
Accordingly, an individual taxpayer can at most claim aggregate deduction of Rs 100,000 under Section 80D.
It may however be noted that expenditure on preventive health checkups of individuals has a sub-limit of Rs 5,000 (i.e. no separate limit) within the overall limit of Rs 25,000 or Rs 50,000 as may be applicable. Also, that deduction of Rs 50,000 towards expenditure on medical treatment of senior citizen members/parents is allowed only when no health insurance premium is paid or claimed as deduction.
B. HUFs
The limit for deductions available to HUF taxpayers in respect of payment of medical insurance premium and expenditure for medical treatment of members under section 80D includes,-
i) payment of medical insurance premium of HUF member(s): Rs. 25,000. However, this limit is Rs 50,000 if any of them is of the age of senior/very senior citizen; and
ii) expenditure on medical treatment of HUF members for whom no medical insurance premium has been paid/ claimed as deduction: Rs 50,000.
It may be noted that overall deduction for HUF taxpayer under Section 80D shall be restricted to Rs 50,000 in aggregate for both the above items.
No Deduction in New Regime
Deduction under section 80D is not available to assessees those who fall under the new tax regime (section 115BAC).
Notes:
1. Deduction for Health Insurance Premium under Section 80D is subject to payment of Premium by any mode other than by way of cash, except for preventive Health Check Ups for which cash payments are allowed.
2. No deduction for Mediclaim Insurance Premium paid for Working Children is allowed to parents, i.e. deductions can be claimed only if the premium is paid for dependent children of the Individual concerned. Non-working male children can be covered upto 25 years of age, whereas female children until marriage.
3. Deduction for Mediclaim Insurance Premium paid for parents and spouse is allowed irrespective of the fact whether they are dependent or independent.
4. Deduction for Mediclaim Insurance Premium under Section 80D includes the amount of GST collected by the Insurance Company.
5. Health Checkup expenditure limit for all eligible members is Rs 5,000 in aggregate, i.e. there is no separate limit for each member.
6. Senior citizen means an individual resident in India who is of the age of sixty years or more at any time during the relevant previous year.
7. Very senior citizen means an individual resident in India who is of the age of eighty years or more at any time during the relevant previous year.
8. Medical insurance premium has to be paid to GIC of India or Any Insurer approved by the IRDAI.
9. Joint contribution: if part payment is made by an individual and part payment by parent(s), then both can claim deduction for their respective contribution provided the premium if directly paid to insurance company in any mode other than by way of cash.
10. Any contribution made by assessee, being individual to Central Government Health Scheme (CGHS) or such other Scheme as may be notified by the Central Government is also covered for deduction under Section 80D.
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