Deduction for Medical
Insurance Premium
(Section
80D of the Income Tax Act)
Deduction in respect of Mediclaim Insurance Premium-
Section
80D provides for a deduction of
- premium paid for mediclaim/health
insurance for self, family & parents,
- amount spent on preventive health chek up for self, family & parents and
- amount spent on medical treatment of an un-insured senior citizen being self, parents or family.
- The detailed
analysis of Section 80D:
Part A - DEDUCTION
FOR SELF, SPOUSE AND DEPENDENT CHILDREN (upto ₹ 25000)
- A
Deduction of ₹ 25000 from taxable income towards premium paid
for
mediclaim/health insurance of self, spouse and dependent children is
available u/s 80D
- Amount
spent upto ₹ 5000 on preventive health check-ups of self, spouse or
dependent children is also eligble for deduction within the overall
limit of ₹ 25000.
- In case assessee is a senior citizen maximum deduction will be increased to ₹ 50000.
- Deduction
is also available of an amount upto ₹ 50000 for medical expenditure
incurred on the health of self, spouse or dependent children being a senior citizen who is not having any health insurance.
- Total deduction on medical insurance/preventive
health check up/medical
expenditure on self or/and family will be limited to ₹ 50,000.
ADDITIONAL
DEDUCTION FOR PARENTS
- A deduction of ₹ 25,000 towards premium paid for
mediclaim/health insurance of parents
is eligible. Amount spent on preventive health
check ups up to ₹ 5,000 is also eligible for deduction within the
limit
of ₹ 25,000.
- In case any of the parent is
senior citizen, amount of deduction will be ₹ 50,000.
- Financial year 2016-17 had introduced a deduction for an amount
upto ₹ 50000 for medical expenditure incurred on the health of parent
being a senior citizen who is not insured.
- Total deduction on medical insurance/preventive
health check up/medical
expenditure on parents will be limited to ₹ 50,000.
Important
Points of Section 80D:
- Premium for health insurance shall not be
paid in cash:
For claiming deduction under Section 80D premium for the health
insurance shall be paid out of the taxable income of the assessee and
shall
be in any mode other then cash. Cash payment of premium is not eligible
for deduction.
- Payment for preventive health check ups can
be made in cash too: Payment for preventive health check ups can
be made in any mode including cash.
- Money can be spent for self or family:
To be eligible for deduction the amount can be spent on self, spouse or
dependent children. To be eligible for additional deduction the money
shall be spent on parent or parents ie. mother & father of the
assessee.
- Amount shall be paid
for following: To
be eligible for
deduction, the amount shall be paid:
- as a premium for health insurance.
- as a contribution to
Central Government Health Scheme or any other scheme approved by
Central Government and/or
- for the Preventive
Health check ups to the maximum of ₹ 5000.
- For medical
expenditure on the treatment of a senior citizen who is not having any health insurance.
- Insurance shall be
from approved insurer: The mediclaim/health insurance policy
shall be in accordance with the:
- schemes framed by General Insurance
Corporation(GIC) of India and approved by Central Government or
- schemes by other insurers approved by Insurance
Regulatory and Development Authority(IRDA) of India.
- Preventive Health
Check ups:
There is nothing specified in the Income Tax Act regarding
preventive health check ups. Preventive health check ups should mean
check ups that are not curative or diagnostic in nature. It should
include annual check ups undertaken by a person to keep a regular watch
on health condition.
- Senior Citizen:
Senior citizen for Section 80D means a person resident in India who is
of the age of 60 years or above on any day during the applicable
year.
Some examples:
- Suppose during an year you have paid mediclaim
premium of ₹ 9000 for
yourself and spent ₹ 6000 on preventive health check ups of your
spouse. The deduction us/ 80D will be ₹ 14000 (premium of ₹ 9000+
5000 on health check up(max 5000 is allowed)).
- Suppose
during the year mediclaim premium for spouse ₹ 12000, money spent on
preventive health check ups of self ₹ 4000. The deduction of Section
80D will be ₹ 16000 (₹ 12000 mediclaim premium + ₹ 4000 health
check ups).
Particulars |
Maximum possible deduction u/s 80D
from FY 2019-20
(Limit for Sr Citizens increased to ₹ 50000 fom
1/4/2019)
|
Maximum
possible deduction u/s 80D
upto FY 2018-19
(till FY 2018-19 maximum limit for Sr Citizens was ₹ 30000)
|
The max deduction possible u/s 80D to an individual (no one being
senior citizen)
|
50000
(25000+25000)
|
50000
(25000+25000)
|
The max deduction possible u/s 80D to an individual when parent/parents
are Senior Citizen
|
75000
(25000+50000)
|
55000
(25000+30000)
|
The max deduction possible u/s 80D to an individual when self
& parents both are senior citizens
|
100000
(50000+50000)
|
60000
(30000+30000)
|
Some other useful Links :
Which Tax Regime
to opt for? New vs. Old Tax System from FY 2020-21
Deduction
for maintenace of a differently abled dependent-Section 80DD
Deduction
u/s 80DDB for medical expenses on specified diseases
Deduction
for Interest on Education Loan u/s 80E
Deduction
U/s 80U to the differently abled
Deduction
for rent paid u/s 80GG
Tax Planning Tips
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