In the present scenario, due to arise of Covid-19, many people are purchasing Health Insurance policies.
Premiums paid on such policies are eligible for deduction u/s.80D of Income Tax Act, which is discussed in detail below:-
(i) Deduction in respect of insurance premium paid for family:-
Deduction to the extent of Rs.25000/- is allowed in respect of the following payments:-
(ii) Deduction in respect of insurance premium paid for Parents:-
Further deduction up to Rs.25000/- is allowable to effect or to keep in force an insurance on the health of parents of the assesse.
(iii) Deduction in respect of payment towards Preventive Health Check-up:-
Deduction to the extent of Rs.5000/- shall be allowed in respect payment made on account of preventive health check-up of self, spouse, dependent children or parents made during the previous year. However, the said deduction of Rs.5000/- is within the overall limit of Rs.25000/- or Rs.50000/-, specified in (i) and (ii) above.
(iv) Mode of payment for claiming Deduction u/s.80D:-
Payment can be made:-
(v) Deduction for medical expenditure incurred on senior citizens:-
Senior Citizens who are unable to get health insurance coverage, can claim deduction up to Rs.50000/- which would be allowed in respect of any payment made on account of medical expenditure in respect of a such person, if no payment has been made to keep in force an insurance on the health of such person.
In Case of HUF:-
Deduction where premium for health insurance is paid in lump sum [Sec.80D (4A)]:-
i. Individual, to effect or keep in force an insurance on his health or health of his spouse, dependent children or parents; or
ii. HUF, to effect or keep in force an insurance on the health of any member of the family,
then, the deduction allowable under this section for each of the relevant previous year would be equal to the appropriate fraction of such lump sum payment.
Ex:- Mr. Praveen took health insurance policy effective for 2 years, policy commencing from 01-09-2020 on 25-08-2020 and made a lump sum payment of Rs.15000/- as premium.
Now, for F.Y 2020-21, the amount of deduction available to him under this section will be Rs.4375/- (9 Months -effective period [Sept, 2020 to Mar, 2021]).
 Quantum of deduction in case of senior citizen:- Increased deduction of Rs.50000/- (instead of Rs.25000/-) shall be allowed in case any of the persons mentioned above is a senior citizen (i.e., an individual resident in India of the age of 60 years or more at any time during the relevant previous year.)