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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:
mediclaim
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 followingTo 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)

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