Section 80D – Deduction in respect of Medical Insurance Premium (Mediclaim)
Tax deductions can be availed on individual health insurance or family floater plans. Premiums paid towards health insurance taken for self, spouse, dependent children and/or dependent parents are allowed for deduction. Deduction under section 80D is allowed only to Individual and HUF, No other person can claim deduction under this section as per Income Tax Act 1961.
The other deduction is allowed under section 80D is for Preventive Health check-up. Section 80D includes a deduction of Rs 5000 for any payments made towards preventive health check-ups. This deduction will be within the overall limit given under section 80D.
Deduction in respect of Individual
Deduction in respect of insurance premium paid for family:
A deduction to the extent of Rs. 25,000 is allowed in respect of the following payments towards medical insurance premium but if individual is senior citizen than deduction is Rs. 50,000.
- Premium paid to effect or to keep in force an insurance on the health of self, spouse and dependent children or
- Any contribution made to the Central Government Health Scheme or
- Such other health scheme as may be notified by the Central Government. Contributory Health Service Scheme of the Department of Space has been notified by the Central Government.
Deduction in respect of insurance premium for parents: A further deduction up to Rs 25,000 is allowable to effect or to keep in force an insurance on the health of parents of the assessee. If parents of individual is senior citizen than deduction is allowed Rs. 50,000.
That means as per the provision of section 80D if individual and his parents both below age of 60 years than maximum deduction will be Rs 50,000 i.e. Rs 25,000 towards individual and Rs. 25,000 towards parents.
If individual is below the age of 60 years and parents more than 60 years than deduction is Rs. 75,000 (25,0000+50,000)
If individual and parents both more than age of 60 years than deduction will be Rs. 100,000 i.e. Rs 50,000 for individual and Rs. 50,000 for parents.
**The deduction of Rupees 5000 is allowed as deduction under preventive health check-up within the maximum limit of Rs. 50,000 Rs. 75,000 and Rs. 100,000.
For HUF
HUF can claim a deduction under section 80D for a mediclaim taken for any of the members of the HUF. This deduction will be Rs 25,000 if the member insured is less than 60 years, and will be Rs 50,000 if the insured is 60 years of age or more.
** The amount of deduction is maximum limit i.e. an asseessee can claim deduction upto maximum limit or actual expenditure whichever is lower.
Section 80D(4A) Deduction where premium for health insurance is paid in lump sum
In case where assesse paid mediclaim premium for more than one year than deduction will be allowed equally in the number of years in which premium is paid by Asseesee i.e. amount of mediclaim is divided over the number of years.
Section 80DD deduction in respect of maintenance including medical treatment of dependent disabled
The amount of deduction is rupees 75,000 in case of severe disability and rupees 125,000 for disability more than 80 percent
Conditions to claim deduction under section 80DD
- For claiming the deduction, the assessee shall have to furnish a copy of the certificate issued by the medical authority under the Persons with Disability (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 along with the return of income under section 139.
- Where the condition of disability requires reassessment, a fresh certificate from the medical authority shall have to be obtained after the expiry of the period mentioned in the original certificate in order to continue to claim the deduction.
- If the dependent, being a person with disability, predeceases the individual or the member of HUF, in whose name subscription was made, then, the amount paid or deposited under the said scheme would be chargeable to tax in the hands of the assessee in the previous year in which such amount is received by the assessee.
*****
This article is for information only and written as per the provision given under income tax law and finance act 2021. For any other information please contact on mail brijlavaniya@yahoo.com amd whatsapp 8879882025.
Author Bio
What is the provision for maximum deduction in case of a family floater policy which includes non-senior parents? Does it consider only 1 limit of Rs.25000 and the rest is non-deductible? Or a combined limit of Rs.50000 (25k+25k) is deductible.
Thanks for the article. But the section 80D(2) of the bare act seems to make a distinction between “amount paid to effect or keep in force a health insurance (ie premium)” under clause a or b, and, “medical expenditure” under clause c or d. And this is further substantiated by the proviso “Provided
that the amount referred to in clause (c) or clause (d) is paid in respect of a senior citizen and no amount has been paid to effect or to keep in force an insurance on the health of such person” (senior citizen)… In a way, the proviso prohibits the assessee to spend on health premium in case of a senior citizen. This is contradictory to your write up according to which, the deduction available on the health premium of a senior citizen is 50000.
Can you please clarify.
Thanks