In this hard time of pandemic where everyone is concerned about their health and wellbeing, what could be better than getting the tax deduction on the premium paid for the same. Yes, Income Tax Act, 1961 provides a deduction under section 80D in respect of health insurance premium. Sec 80D provides deduction of expenditure on:

  • Medical Insurance Premium
  • Contribution to Central Government Health Scheme/Notified Scheme
  • Preventive Health Check-up
  • Medical Expenditure (in case of senior citizens)
Table of Content

Applicability

This section applies to an assessee, being an individual or a HUF.

In case of individual, the aggregate of the sum shall of the following, namely-

  • the whole of the amount paid to effect or to keep in force an insurance on the health of the assessee or his family ( or any contribution made or notified to central government health scheme or any payment made towards preventive health checkup) as does not exceed in the aggregate Rs. 25000 and
  • the whole amount paid towards the health premium of parent or parents of the assessee (or any payment made towards preventive health checkup) as does not exceed in aggregate Rs. 25000.
  • The whole of the amount paid on account of any medical expenditure incurred on the health of an individual or any member of his family shall not exceed in the aggregate Rs. 50000 and
  • The whole of the amount paid on account of medical expenditure incurred on the health of any parent of the assesse as does not exceed in the aggregate Rs. 50000.

If any of the amount referred above in (3) and (4) is paid in respect of a senior citizen and no amount has been paid to effect or to keep in force an insurance on the health of such person. Also the amount specified in (1) and (4) or the amount specified in (2) and (3) shall not exceed Rs. 50000 in aggregate. Wherein the amount mentioned in (1) and (2) are paid on account of preventive checkup, the deduction shall not exceed in aggregate Rs 50000.

Here, family means the spouse and the dependent children of the assessee. And the 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 HUF, the aggregate of the sum shall of the following, namely-

  • Whole of the amount paid to effect or keep in force an insurance on the health of any member of that HUF as does not exceed in aggregate Rs. 25000 and
  • In whole of the amount paid on account of medical expenditure incurred on the health of any member of the HUF as does not exceed Rs. 50000 (earlier the amount was 30000, it is increased to 50000 in Budget 2018).

The aggregate of the sum specified in (a) and (b) shall not exceed Rs. 50000.

In case wherein the sum is paid in lump sum in the previous year to keep in effect an insurance on the health of any person therein for more than one year, then the deduction should be allowed in fraction of the amount.

Who can claim 80D Deduction?

  • Individual for self, spouse, dependent children, parents (dependent or not)
  • HUF for any of the members
  • NRI’s are also eligible for this deduction

Deductions under section 80D

Particulars Deduction for Self & Family Deduction for Parents Preventive Health Check-up Total Deduction
Self & Family (Below 60 Years) 25,000/- 5,000/- 25,000/-
Self & Family + Parents (All below 60 years) 25,000/- 25,000/- 5,000/- 50,000/-
Self & Family (Below 60 years) + Parents (Above 60 years) 25,000/- 50,000/- 5,000/- 75,000/-
Self & Family + Parents (Both above 60 Years) 50,000/- 50,000/- 5,000/- 100,000/-

*Note:- Family includes spouse and dependent children

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