Section 80D: Deduction for premium paid for Medical Insurance

Sandeep Kanoi

CA Abhianchal Dua

Deduction is available up to Rs. 25,000 to a tax payer of premium paid for Medical insurance of self, spouse and dependent children. If individual or spouse is 60 years old or more the deduction available is Rs 30,000. An additional deduction for insurance of parents (father or mother or both, whether dependent or not) is available to the extent of Rs. 25,000 if less than 60 years old and Rs 30,000 if parents are 60 years old or more.

For uninsured super senior citizens (80 years old or more) medical expenditure incurred up to Rs 30,000 shall be allowed as a deduction under section 80D. However, this deduction shall only be allowed if no payment has been made to keep in force the health insurance of such super senior citizen. The aggregate of health insurance premium and medical expenditure incurred in respect of such parents would be limited to Rs. 30,000.

For example, If an individual has paid medical insurance premium of his father (aged 82 years) of Rs. 18000 and also incurred medical expenditure of Rs. 17000. Also he incurred medical expenditure for his mother (aged 81 years) for Rs. 10000. Now, total deduction allowed will be Rs. 18000+10000 i.e. Rs.28000. This is because for father, medical insurance has also been taken so no deduction for medical expenditure of Rs.17000 will be allowed. But for mother, deduction of medical expenditure of Rs.10000 is allowed. Remember, if medical expenditure of mother is Rs.20000, then only Rs.12000 would have been allowed for deduction (18000+12000=30000*) *Maximum limit is Rs.30000.

For claiming deduction, it is mandatory that the above payments should be made by any mode other than cash (e.g. cheque, credit card, debit card, etc.)

Section 80D: Deduction for Preventive Health Check-Up

A deduction of Rs. 5000 will be allowed under this section for payment of preventive health check-up of either the individual himself or his family members which includes spouse, parents and dependent children.

This deduction is NOT in addition to the deduction of Rs.25000/30000 stated above, but is included in the above deduction.

It is important to note that Rs.5000 is the maximum total deduction allowed. This deduction is not per person but in total. So if a person pays an amount for preventive health check up of himself + spouse + dependent children + parents, the gross total deduction allowed would be Rs. 5000.

For preventive health check-up payment can be made by any mode (including cash) for claiming deduction.

Therefore, the maximum deduction available under this entire Section 80D is to the extent of Rs. 60,000.