Deductions under Section 80D can be claimed in respect of medical insurance premiums. This is different in the case of Individuals and Hindu Undivided Families.
Section 80D deductions in case of an Individual
- Deduction 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 –
- Premium paid to effect or to keep in force an insurance on the health of self, spouse and dependent children
- Any contribution made to the Central Government Health Scheme
- Such other health schemes may be notified by the Central Government. The contributory Health Service Scheme of the Department of Space has been notified by the Central Government.
- Deduction in respect of insurance premium for parents
A further deduction up to Rs. 25,000 is allowable to effect or to keep in force insurance on the health of the parents of the assessee.
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.
A senior citizen is an individual resident in India of the age of 60 years or more at any time during the relevant previous year.
- Deduction 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 of payment made on account of preventive health check-up of self, spouse, dependent children or parents 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 as applicable.
- 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;
- By any mode other than cash, in all other cases.
- Deduction for medical expenditure incurred on senior citizens
As a welfare measure towards a senior citizen, who are unable to get health insurance coverage deduction of up to Rs. 50,000 would be allowed in respect of any payment method 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.
Section 80D deductions in case of a HUF
Deduction under section 80D is allowable in respect of the premium paid to ensure the health of any member of the family.
The maximum deduction available to a HUF would be Rs. 25,000 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 of a family who is a resident 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 an insurance on the health of such persons.
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 by a scheme made on this behalf by-
- The General Insurance Corporation of India and approved by the Central Government on this behalf; or
- Any other insurer and approved by the Insurance Regulatory and Development Authority.
In case one of the parents is a senior citizen who is covered under Mediclaim policy and another is also a senior citizen but not covered under Mediclaim policy, the aggregate of deduction, in respect of payment of medical insurance premium and medical expenditure incurred cannot exceed Rs. 50,000.
Deduction where the premium for health insurance is paid in lumpsum
Appropriate fraction of lumpsum premium allowable as a deduction:
In a case where Mediclaim premium is paid in lumpsum for more than one year by:
- An individual, to effect or keep in force an insurance on his health or health of his spouse, dependent children or parents; or
- 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 years would be equal to the appropriate fraction of such lump-sum payment.
Appropriate fraction means 1 divided by the total number of relevant previous years.
Relevant previous year means the previous year in which such lump sum amount is paid, and the subsequent previous years during which the insurance would be in force.
There are other sections about section 80D about expenses of medical uses. These include:
Deduction in respect of maintenance including medical treatment of a dependent disabled
The eligible assessee – Section 80DD provides deduction to an assessee, who is a resident in India, being an individual or Hindu Undivided Family.
Payments qualifying for deduction – any amount incurred for the medical treatment and rehabilitation of a dependent, being a person with a disability,
paid or deposited under a scheme framed on this behalf by the LIC or any other insurer or the Administrator or the Specified Company as referred to in section 2(h) of the UTI Act, 2002.
The scheme should provide for payment of the annuity or a lumpsum amount for the benefit of a dependent, being a person with a disability.
The benefit of deduction under this section is also available to assess incurring expenditure on maintenance including medical treatment of persons suffering from autism, cerebral palsy and multiple disabilities.
Quantum of deduction – The quantum of the deduction is Rs. 75,000 and in case of severe disability, the shall be Rs. 1,25,000.
Deduction in respect of medical treatment
The eligible assessee – This deduction is available to an individual for medical expenditure incurred on himself or a dependent. It is also available to a HUF for such expenditure incurred on any of its members.
Payment qualifying for deduction – Any amount paid for the medical treatment of such disease or ailment as may be specified in the rules made in this behalf by the Board for himself or a dependent, in case the assessee is an individual, or for any member of a HUF, in case the assessee is a HUF, will qualify for the deduction.
Quantum of deduction – The amount of deduction under this section shall be equal to the amount paid or Rs. 40,000 whichever is less.
In case the amount is paid in respect of a senior citizen, then the deduction would be the amount paid or Rs. 1,00,000, whichever is less.