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Section 80D: deduction for health insurance premium and health check-up

Section 80D of Income Tax Act, 1961 provides for deduction in respect of payment made for the health insurance premium and preventive health check-ups. This deduction is allowed only to individual or Hindu undivided family (HUF) taxpayers, for the payment of health insurance premium and preventive health check-ups of their family. This deduction is allowable from Gross Total Income and in addition to the deduction available under section 80C of Income Tax Act.

Deduction in case of individual taxpayer: A maximum amount of up to Rs 25,000/- is eligible as a deduction under section 80D for payment of health insurance premium and preventive health check-up of individual, his/her spouse and his/her dependent children. Further an additional amount of Rs 25,000/- is also eligible for payment of health insurance premium and preventive health check-up of parents of the individual. It may be noted that deduction will be allowed only on the payment of health insurance premium paid for self, spouse, dependent children and parents. No deduction will be allowed on payment made for any other relatives.

Further, if the age of individual taxpayer or parents of the individual taxpayer is above 60 years, then the above maximum limit of Rs 25,000/- is to be read as Rs 50,000/-. This limits can be better understand with the help of below table:-

Situation For self and family For parents Total amount
Both individual and parents age is below 60 years 25,000 25,000 50,000
Individual age is below 60 years and parents age is 60 years or above 25,000 50,000 75,000
Both individual and parents age is 60 years or above 50,000 50,000 100,000

It may be noted that the above maximum amount of deduction includes the amount paid on account of preventive health check-up of up to Rs 5,000/- also.

Deduction in case of HUF taxpayer: A maximum amount of up to Rs 25,000/- is eligible as a deduction under section 80D for payment of health insurance premium of any member of the HUF. Further in case members of the HUF is of 60 years or above, then deduction allowed is up to Rs 50,000/-.

Premium paid in lump sum for multiple years: Where any amount paid for health insurance premium is for more than one year than the proportional amount of deduction is allowed in each relevant year. For example, Mr. Ravi paid a total sum of Rs 60,000/- for a health insurance policy and duration of the policy is 3 years i.e. from FY 2019-20 to FY 2021-22 than the deduction under section 80D will be allowed as Rs 20,000/- for each year i.e. FY 2019-20, 2020-21 and 2021-22 respectively.

Mode of Payment: Deduction for payment of medical insurance premium is only allowed if premium is paid by any mode other than cash i.e. by cheque or bank transfer. However, cash paid for preventive health check-ups will be considered for deduction under section 80D.

Deduction for expenditure on medical treatment: Deduction under section 80D is also allowed on expenditure incurred on medical treatment as per the table below:-

Situation For self and family For parents Total amount
Both individual and parents age is below 60 years NA NA NA
Individual age is below 60 years and parents age is 60 years or above NA 50,000 50,000
Both individual and parents age is 60 years or above 50,000 50,000 100,000

However deduction for expenditure incurred on medical treatment will only be allowed if no medical insurance policy is taken. In other words, if a medical insurance policy is taken then no deduction is allowed for expenditure incurred on medical treatment.

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