Deduction in Respect of Medical Insurance Premia Section 80D of the Income Tax Act

Deduction and benefit under section 80D in respect of Payment of Medical Insurance Premium and  contribution to eligible schemes approved by central Government. Benefit under Section 80D of the Income Tax Act, 1961 can be claimed for insurance premium paid for family members also. Maximum amount of deduction under section 80D is Rs 15000/- and section 80D is applicable only to individual and HUF.

So any Individual or HUF assessee can claim deduction of Rs 15000 under section 80D of the Income Tax Act for health insurance premium for himself and his family.

Conditions

  • The assessee is an individual (may be Resident or Non Resident or Indian citizen/or foreign citizen) or a HUF (Resident or Non Resident)
  • The insurance premium for himself or his family is paid or any contribution made to the scheme must be in accordance with the scheme framed in this behalf by the General insurance Corporation of India and approved by the Central govt. or in accordance with the scheme framed in this behalf by any other insurer and approved by Insurance Regulatory and development authority.
  • Any payment made for the preventive health check of assessee or his family, then deduction is limited to Rs.15,000/-
  • The premium can be paid by any mode “other than cash” in the previous year out of his income chargeable to income tax.
  • Family means the spouse and dependent children of the assessee.
  • Maximum deduction available under this section is Rs.15000 and additional amount of Rs. 5000 is deductible when policy is taken on the health of a senior citizen i.e. resident in India and 60 years or more).

Recent Amendment by Finance Bill 2013 in section 80D of the Income Tax Act: For giving benefits to individual who are contributing to the schemes of state government which are similar in nature to Central Government Health Scheme.

In section 80D of the Income-tax Act, in sub-section (2), in clause (a), after the words “Central Government Health Scheme”, the words “or such other scheme as may be notified by the Central Government in this behalf” shall be inserted with effect from the 1st day of April, 2014.

Reference: Section 80D of the Income Tax Act, 1961

Deduction in respect of health insurance premia.

80D. (1) In computing the total income of an assessee, being an individual or a Hindu undivided family, there shall be deducted such sum, as specified in sub-section (2) or sub-section (3), payment of which is made by any mode, other than cash, in the previous year out of his income chargeable to tax.

(2) Where the assessee is an individual, the sum referred to in sub-section (1) shall be the aggregate of the following, namely:—

(a)  the whole of the amount paid to effect or to keep in force an insurance on the health of the assessee or his family or any contribution made to the Central Government Health Scheme or any payment made on account of preventive health check-up of the assessee or his family as does not exceed in the aggregate fifteen thousand rupees; and

(b)  the whole of the amount paid to effect or to keep in force an insurance on the health of the parent or parents of the assessee or any payment made on account of preventive health check-up of the parent or parents of the assessee as does not exceed in the aggregate fifteen thousand rupees.

Explanation.—For the purposes of clause (a), “family” means the spouse and dependant children of the assessee.

The following sub-sections (2A) and (2B) shall be inserted after sub-section (2) of section 80D by the Finance Act, 2012, w.e.f. 1-4-2013 :

(2A) Where the amounts referred to in clauses (a) and (b) of sub-section (2) are paid on account of preventive health check-up, the deduction for such amounts shall be allowed to the extent it does not exceed in the aggregate five thousand rupees.

(2B) For the purposes of deduction under sub-section (1), payment shall be made by—

 (i)  any mode, including cash, in respect of any sum paid on account of preventive health check-up;

(ii)  any mode other than cash in all other cases not falling under clause (i).

(3) Where the assessee is a Hindu undivided family, the sum referred to in sub-section (1) shall be the whole of the amount paid to effect or to keep in force an insurance on the health of any member of that Hindu undivided family as does not exceed in the aggregate fifteen thousand rupees.

(4) Where the sum specified in clause (a) or clause (b) of sub-section (2) or in sub-section (3) is paid to effect or keep in force an insurance on the health of any person specified therein, and who is a senior citizen, the provisions of this section shall have effect as if for the words “fifteen thousand rupees”, the words “twenty thousand rupees” had been substituted.

Explanation.—For the purposes of this sub-section, “senior citizen” means an individual resident in India who is of the age of sixty-five years or more at any time during the relevant previous year.

(5) The insurance referred to in this section shall be in accordance with a scheme made in this behalf by—

(a)  the General Insurance Corporation of India formed under section 9 of the General Insurance Business (Nationalisation) Act, 1972 (57 of 1972) and approved by the Central Government in this behalf; or

(b)  any other insurer and approved by the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999).

One thought to “Deduction in Respect of Medical Insurance Premia Section 80D of the Income Tax Act”

  1. We paid premium an amount of Rs.41452/- on dtd. 10.07.2013 for the 5 year (10/07/2013 to 09/07/2018) in section 80D against Major Medical illness.

    So we can claim in 5 Year or only Rs.15000/- in paid year ?

    Pl sugget

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