Vaibhav Gandhi

Vaibhav GandhiMedical insurance plan or a health insurance plan of general insurance company works on the principle of reimbursement of your hospitalization expenses. If you invested in any of such policy then you can claim income tax deduction under section 80D of income tax act, 1961.

This deduction is allowed only to an individual (resident / non resident/ Indian citizen/ foreign citizen) or a Hindu undivided family (resident/ non resident).

Which payments qualify for deduction under Section 80D?

Payment is made towards premium for mediclaim policy.

Note that medical insurance policy refers to mediclaim policies (where you submit bills and get re-imbursement). Fixed benefit policies like personal accident and critical illness policies do not qualify for this deduction.

Also note that from financial year 2013-14 onwards, in case of the individual taxpayer, following payment also qualifies for the deduction:

•Payment made to the Central Government Health Scheme, and

•Preventive health check-up will also qualify towards this deduction.

Can the premium be paid in cash?

For medical insurance premium, you have to pay by a mode other than cash (e.g. credit card, cheque, net banking etc.). If you pay by cash, deduction under Section 80D is not allowed.

However, payment on account of preventive health check-up can be made by any mode (including cash).

The deductions one can get under Section 80D are:

Individual can make payment for wife or husband or dependent children and deduction shall be allowed equal to the amount paid but subject to a maximum of Rs 15,000 but in case of senior citizen deduction shall be allowed upto Rs. 20,000.

If the individual has taken policy in the name of parents (dependent or independent), additional deduction shall be allowed to the extent of the premium paid but maximum Rs15,000, however, if the policy has been taken in the name of senior citizen, deduction shall be allowed to the extent of Rs20,000.

Deduction for preventive health check up shall be maximum Rs5,000 in aggregate. For self, spouse, dependent children and parents.

Hindu undivided family can take the policy in the name of any of its member and deduction shall be allowed in the similar manner.

Definition of senior citizen as per Income Tax Act

Senior citizen means is a resident individual and whose age at any time during the year should be at least 60 years.

No one can claim deduction under Section 80D for mediclaim premium payment for my in-laws. You can only claim for parents.

One can submit bills for preventive check-up test reports in excess of Rs. 5,000 to his/her employer and claim it under “medical reimbursement”.

Deduction under Section 80D is available on “payment basis” and can claim whatever payment have made in the same year itself, though it may relate to future years. So for advance premium claim under section 80D is available.

Additional Points To Have In Mind While Claiming Deduction For Medical Insurance Premium Under Section 80D.

• You can claim deduction for you payment irrespective of your residential status i.e. any individual being a resident or non resident can claim this deduction.

• If you are not an Indian citizen (i.e. a foreign citizen) then you also can claim benefit of paying your medical insurance your medical insurance premium under section 80D of income tax act.

• The insurer to whom you are making this payment should be an approved insurer (i.e. should have been approved by Insurance Regulatory and Development Authority).

• The premium amount should have been paid in any mode other than cash. If it is paid by cash then the premium paid will not be eligible for income tax deduction under section 80D of income tax act.

• Senior citizen means one who is a resident in India and who is at least of 60 years of age at any time during the previous year.

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0 responses to “Deduction in respect of medical insurance premium- section 80D”

  1. Abhay Singh says:

    Critical Illness policies are also eligible for tax benefit under section 80D. Please rectify the same in your article.

  2. kumuda says:

    Why no deduction on cash payment?is there any specific reason?

  3. Rinkesh says:

    If payment made from my child’s bank account then what about 80d

  4. Vinoth says:

    If the parental insurance premium is paid from the account of agent and the bill is on my fathers name, Can I claim this under 80D?

  5. Parth says:

    Why is it so that we insurance companies accept mediclaim insurance premium in cash but under the Income Tax act it is mentioned that we cannot claim benefit of 80D if we have paid the insurance in cash. Insurance company accepts mediclaim premium in cash so why do they accept the payment in cash???

  6. P K Raj says:

    How can one calculate accurately the income from Bank Multi option deposits as on 31Mar and pay advance tax

  7. GOUTAM ROY says:

    Goutam Roy (Husband) & Piku Roy (wife) have family mediclaim policy for last 17 years & premium being paid by chq by husband till date . If wife pays the next premium (policy will be same as before, i.e. Goutam Roy & Piku Roy) from her account , will she get income tax benefit upto 15000 in her file ? Please advise us.

  8. sam says:

    Hello,

    Can you please send me the links of policies i can enrol for taking tax advantage under sec 80 D

    Also confirm me what are the benefit if I dont have any claim from my end in this policy.. Will I get back my premium paid with interest or some bonus or I will not get any thing ??

    Regards
    Sam

  9. parag Agarwal says:

    Sir, why it should be only in non-cash manner.. What is the benefit of government .. I.e. It is giving this provision only for Health Insurance premium and not for any other insurance..

  10. Dharmesh Bhansali says:

    I am paying
    1. 6000/- (Self, spouse and child)
    2. 19000/- (Self, father and mother)

    How much I can claim under 80D ?

  11. Rajendra K. Sheth says:

    Is the over limit of Rs. 15,000/- both for Mediclaim Insurance Premium and Preventive health check up or if one has paid Rs. 17,500/- as Health premium and also incurred Rs. 7,000/- as preventive health checkup can he claim Rs. 15,000/- + Rs. 5,000/- or is it just overall Rs. 15,000/-.

  12. Deepak says:

    May be the age of senior citizen is 65 or more at the time during relevant previous year as per old rules regarding senior citizns age but now it it is reduced 65 to 60 so now 60 is applicable before any new ammendment

  13. Deepak says:

    May be the age of senior citizen is 65 or more at the time during relevant previous year

  14. Priyanka says:

    Dear Sir,
    Thank u for giving details regarding preventive health check up deduction under 80D.
    My query is which proof should be attached as a pyament agst this chk up is cash reciept or the test report mentioning the actual paid amount.

    • Vaibhav Gandhi says:

      Don’t have to attach, just keep both these proofs with u in case assessing officer demand for the proof then show both the proofs.

  15. Vaibhav Gandhi says:

    Hi
    Its 60 instead of 65 years.

    Regards
    Vaibhav

  16. Vaibhav Gandhi says:

    Hi
    Sorry its 60 not 65 yrs.
    Regards
    Vaibhav

  17. amar ante says:

    Premium paid to critical illness health insurance policies are also eligible for deduction under 80D. Please clarify.

  18. Adnan says:

    why there are 2 different yrs specified for senior citizen firstly it is said 60yrs and in last point it is written 65yrs???????

  19. Vardharajan AV says:

    Good article. but you have mentioned the age of senior citizen as 60 in one place and 65 in another place. which one is correct?

  20. Yogesh says:

    In above article, In Para ‘Definition of senior citizen as per Income Tax Act’, senior citizen’s age is mentioned as 60 years whereas in last para it is mentioned as 65. Which one is correct?

  21. Ramesh G says:

    Hi,

    If the Medicalim Premium Receipt received in my Parents name, but i have evidence of payment then can i claim this benefit?

    Regards,
    Ramesh G

  22. R Balasubramanian says:

    A good and useful brief. I think the age for senior citizen indicated in the last para needs correction.
    R Balasubramanian, Chennai-59.

  23. venkat says:

    QUOTE No one can claim deduction under Section 80D for mediclaim premium payment for my in-laws UNQUOTE
    I presume the spouse can pay the insurance premium and deduct from his/her return

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