Due to Covid-19, many people are purchasing health insurance policies and premium paid on these policies are eligible for deduction under section 80D of Income Tax Act.

Content

In case of individual

In case of HUF

Condition for Deduction

In case of individual

  1. Deduction in respect of insurance premium paid for family:

In case of family, deduction to the extent of ₹25000 is allowed in respect of following payments:

  • Premium paid to effect or keep in force an insurance on the health of self, spouse and dependent children or
  • Any contribution made to the Central Government Health Scheme or
  • Such other health scheme as may be notified by Central Government.
  1. Deduction in respect of insurance premium paid for parents

Additional amount of deduction to the extent of ₹25000 is allowable to effect or to keep in force insurance on the health of parents of the assesse.

  1. Deduction in respect of payment made for preventive health check-up

Deduction of amount up to ₹5000 shall be allowed towards payment of preventive health check-up of self, spouse, dependent children or parents made during the previous year.

This deduction amount is within the overall limit of ₹25000 or ₹50000.

  1. Mode of payment for claiming deduction under section 80D

The payment can be made by:

  • Any mode including cash in respect of any sum paid on account of preventive health check-up.
  • Any mode other than cash in all other cases.
  1. Deduction for medical expenditure incurred on senior citizens

Senior citizens who are unable to get health insurance coverage, can claim deduction up to ₹50000 which would be allowed towards any payment made on account of medical expenditure in respect of such person, if no payment has been made to keep in force an insurance on the health of such person.

In case of HUF

Premium paid to insure the health of any member of the family shall be allowed as deduction under this section. The amount of deduction allowed in case of HUF would be ₹25000 and ₹50000 in case of senior citizen. Further, the amount paid on account of medical expenditure incurred on the health of any member of a family who is a senior citizen would qualify for deduction subject to maximum of ₹50000 provided no amount has been paid to effect or keep in force any insurance on the health of such person.

Condition

Under this case premium should be paid by any mode other than cash, in the previous year out of his income chargeable to tax.

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

  • If premium for health insurance is paid in lump sum for more than one year by:
  1. Individual, to effect or keep in force an insurance on his health or health of his spouse, dependent children or parents
  2. HUF, to effect or keep in force an insurance on his 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.

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