Person Eligible for deduction under Section 80D
Individuals (Resident or Non-resident) or Hindu Undivided Family (HUF) are eligible to claim deduction under Section 80D if the amount paid for medical insurance premium. Any payment made by an individual to purchase medical insurance for his/her spouse, children (dependent), Parents (whether dependent or not).
Quantum of Deduction available under Section 80D
An individual is eligible to claim deduction of up to Rs. 25,000 for the medical insurance of self, spouse, and dependent children and an additional deduction for the medical insurance of parents is available to the extent of Rs 25,000 if their age is 60 years, or Rs. 50,000 if age exceeds 60 years. The maximum amount of deduction that can be claimed under section 80D is Rs.100,000 if the age of taxpayer and age of the parents exceeds 60 years.
In the case of Hindu Undivided Family (HUF) deduction for the payment of medical insurance premium is allowed, if payment is made in the name of any member of HUF. If the age of the HUF member exceeds 60 years, the amount of deduction will be Rs. 50,000 instead of Rs. 25,000.
Deduction for Preventive Health Check-up
Any payments made by an individual towards preventive health check-up will be eligible for deduction under section 80D up to Rs. 5,000 which is included within the limit of Rs.25,000 or Rs. 50,000 as the case may be. A deduction can be availed either by the individual, spouse of the individual, dependent children, or parents. The payment for preventive health check-up can be made in any mode including cash payment.
Single-Premium Health Insurance Policies
A taxpayer can claim a deduction equal to the appropriate fraction of the amount, in case of single premium medical insurance policies, where a taxpayer has made a lump-sum premium payment in a year for a policy valid for more than one year. The fraction amount is arrived, by dividing the lump sum premium paid, by the number of years of the policy. However, this would again be subject to the limits of Rs.25,000 of Rs.50,000 as the case may be.
Things to keep in mind before investing
- Amount of premium must be paid towards Medical insurance plans approved by the Central Government (CG) or the Insurance Regulatory and Development Authority (IRDA).
- Amount of the premium must be paid by any mode other than cash.
- Senior citizen is an individual who is 60 years old or more during the financial year.
- Amount of premium paid for any sibling, grandparents, aunts, uncles or any other relative cannot be claimed as a deduction under section 80D.
- Amount of Premium paid for Independent children cannot be claimed as deduction.
- In the case of part payment by an individual and parent, both can claim a deduction to the extent amount paid by each.
- Group Health Insurance premium provided by the company is not eligible for deduction.
