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2018

Section 80D: Deductions for Medical Insurance Premium

Deduction U2FS 80E Interest on Education Loan 1

Considering the rising inflation in health care sector in India, medical insurance policy has become a must for all. However, government has offered a sigh of relief particularly to lower and mid income group assessees by extending the amount of deduction which can be availed in respect of medical insurance premium. Section 80D of Income Tax Act, 1961 deals with this matter. According to section 80D, a deduction from gross total income can be availed in respect of medical insurance premium paid by an individual / HUF assessee up to certain limit. Such deduction can be claimed for premium paid for self, spouse, dependent children and parents. Similarly, an HUF can claim deduction in respect of premium paid for any of the members of HUF.

Who can claim deduction u/s 80D?

 

Rules for Individual:

  • An Individual can claim deduction in respect of premium paid for self, spouse or for dependent children.
  • Deduction can also be claimed in respect of premium paid for parents.
  • Maximum deduction limit is up to Rs. 25,000 for non-senior citizens and up to Rs. 50,000 for senior citizens.
Premium Paid For Maximum Deduction
Self & Family 25,000
Self & Family + Parents 25,000 + 25,000 = 50,000
Self & Family + Parents (Senior Citizen) 25,000 + 50,000 = 75,000
Self (senior citizen) & family + Parents (senior citizens) 50,000 + 50,000 = 1,00,000

 

Notes:

  • Dependent Children include legitimate or legally adopted children.
  • Children above 18 years, if employed, cannot be covered.
  • Male children, if not employed, but a bonafide student can be covered up to age of 25 years.
  • Female children, if not employed, can be covered until the time she is married.
  • Parents of Individual: parents need not be dependent on the Assessee.
  • Children above the age of 3 months can be covered provided parents are covered concurrently and suitable premium is paid.

 

Rules For HUF:

  • Deduction can be claimed towards Mediclaim premium paid for any member of the HUF.
  • Maximum deduction Under Section 80D is Rs 25,000.
  • In case any member of the HUF covered by Mediclaim policy is a senior citizen, deduction Under Section 80D amount is enhanced to Rs. 50,000.


Payment of Premium:

In order to avail any deduction, the amount must have been paid using the taxpayer’s income chargeable to tax. Moreover, the payment must be made using account payee mode only.

Part Contribution towards Medical Premium:

If only part payment is made by an assessee towards a medical premium, he/she can claim deduction up to the amount of premium paid by him/her.

Validity of Medical Policy:

Only such Mediclaim premium paid under Medical insurance scheme of General Insurance Corporation approved by the Central Government, or any other insurer approved by the Insurance Regulatory & Development Authority (IRDA) can be claimed as deduction.

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