80D Limit Increased from 15000 to
25000-Budget 2015 Deduction given for medical exp. of very senior citizen
Amendment in section 80D relating to deduction
in respect of health insurance premia
The existing provisions contained in section
80D, inter alia, provide for deduction of
a) upto fifteen thousand rupees to an assessee,
being an individual in respect of health insurance premia, paid by any mode,
other than cash, to effect or to keep in force an insurance on the health of
the assessee or his family or any contribution made to the Central Government
Health Scheme or any other notified scheme or any payment made on account of
preventive health check up of the assessee or his family; and
b) an additional deduction of fifteen thousand
rupees is provided to an individual assessee to effect or to keep in force
insurance on the health of the parent or parents of the assessee.
A similar deduction is also available to a
Hindu undivided family (HUF) in respect of health insurance premia, paid by any
mode, other than cash, to effect or to keep in force insurance on the health of
any member of the HUF. The section also presently provides for a deduction of
twenty thousand rupees in both the cases if the person insured is a senior
citizen of sixty years of age or above.
The quantum of deduction allowed under Section
80D to individuals and HUF in respect of premium paid for health insurance had
been fixed vide Finance Act, 2008 at Rs.15000/- and Rs.20,000/- (for senior
citizens). In view of continuous rise in the cost of medical expenditure, it is
proposed to amend section 80D so as to raise the limit of deduction from
fifteen thousand rupees to twenty five thousand rupees. It is further
proposed to raise the limit of deduction for senior citizens from twenty
thousand rupees to thirty thousand rupees.
Further, very senior citizens are often unable
to get health insurance coverage and are therefore unable to take tax benefit
under section 80D. Accordingly, as a welfare measure towards very senior
citizens ,it is also proposed to provide that any payment made on account of
medical expenditure in respect of a very senior citizen, if no payment has been
made to keep in force an insurance on the health of such person, as does not
exceed thirty thousand rupees shall be allowed as deduction under section 80D.
The aggregate deduction available to any
individual in respect of health insurance premia and the medical expenditure
incurred would however be limited to thirty thousand rupees. Similarly
aggregate deduction for health insurance premia and medical expenditure
incurred in respect of parents would be limited to thirty thousand rupees.
Example:
(i) For Individual and his family Rs.
Health
insurance premia 21,000
(ii) For parents
Health insurance
of Mother : 18,000
Medical expenditure on father (very senior citizen) 15,000
Deduction
eligible u/s 80D Rs. 21000 + Rs. 30000 = Rs. 51,000
It is also proposed to define a ‘very senior
citizen’ to mean an individual resident in India who is of the age of eighty
years
or more at any time during the relevant
previous year.
These amendments will take effect from the 1st
April, 2016 and will, accordingly, apply in relation to the assessment year
2016-17 and subsequent assessment years.
