Deduction in respect of health insurance premia under Section 80D

Analysis of Section 80D

In case of an Individual

(a) Deduction in respect of insurance premium paid for family: A deduction to the extent of ₹ 25,000 is allowed in respect of the following payments-

(1) premium paid to effect or keep in force an insurance on the health of self, spouse and dependant children or

(2) any contribution made to the Central Government Health Scheme or

(3) such other health scheme as may be notified by the Central Government. Contributory Health Service Scheme of the Department of Atomic Energy has been notified by the Central Government.

(b) Deduction in respect of insurance premium for parents: A further deduction up to ₹ 25,000 is allowable to effect or to keep in force an insurance on the health of parents of the assessee. There is no difference that parents are dependent or not.

Quantum of deduction in case of senior citizen: An increased deduction of ₹ 50,000 (instead of ₹ 25,000) shall be allowed in case any of the persons mentioned above is a senior citizen /.e., an individual resident in India of the age of 60 years or more at any time during the relevant previous year.

(c) Deduction in respect of payment towards preventive health check-up:

Section 80D provides that deduction to the extent of ₹ 5,000 shall be allowed in respect payment made on account of preventive health check-up of self, spouse, dependant children or parents made during the previous year. However, the said deduction of ₹ 5,000 is within the overall limit of ₹ 25,000 or 50,000), specified in (a) and (b) above.

(d) Deduction for medical expenditure incurred on senior citizens: As a welfare measure towards i.e., person of the age of 60 years or more and resident in India, who are unable to get health insurance coverage, deduction of upto would be allowed in respect of any payment made on account of medical expenditure in respect of a such person(s), if no payment has been made to keep in force an insurance on the health of such person(s)

Though medical expenditure is not defined anywhere in the Act, but going by the motive, medical expenditure should cover every medical expense whether or not these expenditure are covered under any health insurance policy. Therefore, you can say that expenses such as consultation fees, medicines, hearing aids and so on can be claimed as deduction.”

“Senior citizen” means an individual resident in India who is of the age of 60 years or more at any time during the relevant previous year.

(e) Mode of payment: For claiming such deduction under section 80D, the payment can be made:

(1) by any mode, including cash, in respect of any sum paid on account of preventive health check-up;

(2) by any mode other than cash, in all other cases.

It is to be noted that only cash payment can be made in cash for preventive health checkup. No other cash payment is being allowed to avail deduction u/s 80D of the Act. It is further to be noted that no cash payment is allowed even in case of medical expenditure incurred for senior citizen.

In case of a HUF

Deduction under section 80D is allowable in respect of premium paid to insure the health of any member of the family. The maximum deduction available to a HUF would be ₹25,000 and in case any member is a senior citizen, ₹ 50,000.

Further, the amount paid on account of medical expenditure incurred on the health of any member(s) of a family who is a would qualify for deduction subject to a maximum of 50,000) provided no amount has been paid to effect or keep in force any insurance on the  health of such person(s).

Other conditions

The other conditions to be fulfilled are that such premium should be paid by any mode, other than cash, in the previous year out of his income chargeable to tax. Further, the medical insurance should be in accordance with a scheme made in this behalf by –

(a) the General Insurance Corporation of India and approved by the Central Government in this behalf; or

(b) any other insurer and approved by the Insurance Regulatory and Development

Deduction where premium for health insurance is paid in lump sum [Section 80D(4A)]

(a) Appropriate fraction of lump sum premium allowable as deduction: In a case where mediclaim premium is paid in lumpsum for more than one year by:

(1) an individual, to effect or keep in force an insurance on his health or health of his spouse, dependent children or parents; or

(2) a 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.

Example:

Rohan is aged 45 years, and his father is aged 75 years. Rohan has taken a medical cover for himself and his father for which he pays insurance premium of Rs 30,000 and Rs 35,000 respectively. What would be the maximum amount he can claim by way of a deduction under Section 80D?

Ans: Rohan can claim up to Rs 25,000, for the premium paid on his policy.

As for the policy taken for his father, who is a senior citizen, Rohan can claim up to Rs.50,000. In the given case, the deduction is Rs 25,000 and Rs 35,000. Therefore, the total deduction that he can claim for the year is Rs 60,000

Deducation for Individual & HUF

♦ *Family members includes individual, his/her spouse and dependent children.

♦ *Parents may be dependent or not. But it does not include father-in-law / mother-in-law.

♦ *.In case any of the persons specified above (i.e. husband, wife, father, mother)  is a senior citizen (i.e. 60 years or more) and Mediclaim  Insurance premium is paid for such senior citizen, deduction amount is  Rs. 50,000. If father is of 62 years and mother is of 58 years, the benefit of senior citizen will be available.

♦ * In case a non-resident  is of age 60years or above, he shall not get benefit of enhanced deduction of Rs. 50,000.But if father is a non- resident senior citizen and mother is a resident senior citizen, the benefit of Rs.50000/-will be allowed. Any of two must be a resident senior citizen.

♦ * The aggregate payment on account of preventive health check-up of self, spouse, dependent children, father and mother cannot exceed Rs. 5,000.

♦ ** Medical Expenditure is allowed if no amount has been paid towards health insurance of such person

Can you get deduction u/s 80D of Mediclaim policy for Overseas Journey?

Deduction for policy for overseas travel can be taken. There is nothing in the provision u/s 80D which prohibits claim of deduction u/s 80D for medical insurance for overseas journey. The only requirement, as given in section 80D(5) is that the insurance companies issuing such overseas insurance should be one of these

(5) The insurance referred to in this section shall be in accordance with a scheme made in this behalf by

(a) the General Insurance Corporation of India formed under section 9 of the General Insurance Business (Nationalisation) Act, 1972 (57 of 1972) and approved by the Central Government in this behalf; or

(b) any other insurer and approved by the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999).

In case of any doubt or query, readers are requested to approach the author at ca.rskalra@yahoo.com.

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5 Comments

  1. Amit Suchak says:

    If I buy policy for parent who is 64 year with 2 years premium of 36,000 then need to claim this entire amount this year or 18000 this year and 18000 next year?

  2. Somya verma says:

    Attendent & transport expenditure incurred in r/o medical where no hospital or treatment avaiable can claim expenditure deductions u/s 80 D.. No any tax guru has still clarify this issue. My wife got knee replacement from Amrirtsar from Amandeep Hospital from Batala lot of expe

  3. Somya verma says:

    Attendent & transport expenditure incurred in r/o medical where no hospital or treatment avaiable can claim expenditure deductions u/s 80 D.. No any tax guru has still clarify this issue. My wife got knee replacement from Amrirtsar from Amandeep Hospital from Batala lot of expe

  4. Vipan kumar verma says:

    Continue from previous – a lot of expenditure incurred in transportation as well one attendent as she admitted 14 days in said hospital. Both husband & wife can claim dedictions 80D equally if amount exceed prescribed limits. Under Section 80 D on rebotic knee replacement of spouse.

  5. Vipan kumar verma says:

    Attendent & transport expenditure incurred in r/o medical where no hospital or treatment avaiable can claim expenditure deductions u/s 80 D.. No any tax guru has still clarify this issue. My wife got knee replacement from Amrirtsar from Amandeep Hospital from Batala lot of expe

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