Deduction in respect of Health/ Medical Insurance Premium of Family/ Parents under IT Section 80D

Section 80D of the Income Tax Act, 1961 allows deduction to Individual and HUF taxpayers for payment of Health/ Medial Insurance Premium in respect of family, parents, etc., during the previous year, from the Income Chargeable to tax for that year.

Eligibility for 80D Deduction

An Individual (resident/ non-resident) taxpayer can claim deduction under IT Section 80D for the health insurance premium or medical insurance premium paid for the following:

i) Family (i.e. Self, Spouse and dependent Children)

ii) Parents

An HUF taxpayer can claim deduction under IT Section 80D in respect of health insurance premium or medical insurance premium paid for any member of the HUF.

80D Deduction Limit for Individuals

For Individual taxpayer, in respect of medical insurance premium, following deductions are available under IT Section 80D:

i) Health Insurance Premium for assessee or the family including payments made for preventive health check ups: Rs.25,000 (Rs. 30,000 for senior or very senior citizen)

ii) Health Insurance Premium for Parent(s): Rs.25,000 (Rs. 30,000 for senior or very senior citizen)

iii) Medical expenditure on the treatment of assessee, family: Rs. 30,000, provided the same is paid for very senior citizen for whom no medical insurance premium has been paid/ claimed as deduction.

iv) Medical expenditure on the treatment of parents: Rs. 30,000, provided the same is paid for very senior citizen for whom no medical insurance premium has been paid/ claimed as deduction.

It may however be noted that expenditure on preventive health check ups has a sub-limit of Rs. 5,000 (i.e. no separate limit) and that total deduction for items i) and iii) can’t exceed Rs. 30,000 and for items ii) and iv) can’t exceed Rs. 30,000, i.e. at the most an individual taxpayer can claim aggregate deduction under Section 80D upto Rs. 60,000.

80D Deduction Limit for HUFs

For HUF taxpayer, in respect of medical insurance premium, following deductions are available under IT Section 80D:

i) Medical insurance premium of HUF member(s) upto Rs. 25,000

ii) Medical expenditure incurred in respect of very senior citizen member(s) of the HUF upto Rs. 30,000 for whom no medical insurance premium has been paid/ claimed as deduction.

However, the overall deduction for HUF taxpayer under Section 80D shall be restricted to Rs. 30,000 in aggregate for both the above items.

Notes:

1. Deduction for Health Insurance Premium under Section 80D is subject to payment of Premium by any mode other than by way of cash, except for preventive Health Check Ups for which cash payments are allowed.

2. No deduction for Mediclaim Insurance Premium paid for Working Children is allowed to parents, i.e. deductions under IT Section 80D can be claimed only if the premium is paid for dependent children of the Individual concerned. Non-working male children can be covered upto 25 years of age, whereas female children until marriage.

3. Deduction for Mediclaim Insurance Premium paid for parents and spouse is allowed irrespective of the fact whether they are dependent or independent.

4. Deduction for Medicalim Insurance Premium under Sectin 80D excludes the amount of Service Tax collected by the Insurance Company, i.e. only net premium if eligible for 80D deduction.

5. Health Check up expenditure limit for all eligible members is Rs.5,000 in aggregate, i.e. there is no separate limit for each member.

6. Senior citizen means an individual resident in India who is of the age of sixty years or more at any time during the relevant previous year.

7. Very senior citizen means an individual resident in India who is of the age of eighty years or more at any time during the relevant previous year.

8. Medical insurance premium has to be paid to GIC of India or Any Insurer approved by the IREDA.

9. Joint contribution: if part payment is made by an individual and part payment by parent(s), then both can claim deduction for their respective contribution provided the premium if directly paid to nsurance company in any mode other than by way of cash.

10. Any contribution made by assessee, being individual to Central Government Health Scheme (CGHS) or such other Scheme as may be notified by the Central Government is also covered for deduction under Section 80D.