In case of an Individual
(a)Deduction under section 80D in respect of insurance premium paid for family:
A deduction to the extent of Rs. 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 under section 80D in respect of insurance premium for parents:
A further deduction up to Rs. 25,000 is allowable to effect or to keep in force an insurance on the health of parents of the assessee.
Quantum of deduction in case of senior citizen: An increased deduction of Rs. 50,000 (instead of Rs. 25,000) 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.
(c)Deduction under section 80D in respect of payment towards preventive health check-up:
Section 80D provides that deduction to the extent of Rs. 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 Rs. 5,000 is within the overall limit of Rs. 25,000 or Rs. 50,000, specified in (a) and (b) above.
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(d)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.
(e)Deduction for medical expenditure incurred on senior citizens:
As a welfare measure towards senior citizens 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 Rs. 50,000 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).
‘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.
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 Rs. 25,000 and in case any member is a senior citizen, Rs.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 senior citizen would qualify for deduction subject to a maximum of Rs. 50,000 provided no amount has been paid to effect or keep in force any insurance on the health of such person(s).
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 Authority.
Section 80D(4A): Deduction where premium for health insurance is paid in lump sum
(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.
(b)Meaning of terms
(i)Appropriate fraction: 1 ÷ Total number of relevant previous years
(ii)Relevant previous year: The previous year in which such lump sum amount is paid; and the subsequent previous year(s) during which the insurance would be in force.