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Section 80D Deduction in Respect Of Health Insurance Premia

If you cannot buy health insurance for your parents and you do not have money to invest under section 80C for the purpose of tax-saving? Now your problem has a solution, you can still save tax under section 80D by claiming deduction for medical expenditure for your parents.

We all know that we can save tax by buying health insurance for our family and our parents. But as our parent grows older, the premium amount on health insurance goes up.

Any person/Hindu Undivided Family (HUF) can claim deduction for their medical insurance under Section-80D which is taken from their total income in any given year. Through this you just not only take benefit by buying a health plan for yourself but also you can take benefit of buying the policy to cover your spouse, or your dependent children or parent.

In case of an Individual

(a) Deduction of insurance premium paid for family: A deduction to the limit of INR 25,000 is allowed in respect of these payments mentioned below-

  • Premium paid to effect or keep in force an insurance on the health of self, spouse and dependent children or
  • Any contribution made to the CGHS (a.k.a. Central Government Health Scheme) or
  • These kind of other health scheme as may be notified by the Central Government. Department of Atomic Energy’s Contributory Health Service Scheme has been notified by the Central Government.

(b) Deduction in insurance premium for parents: A further deduction up to INR 25,000 is allowable to effect or to keep in force insurance on the health of parents of the assessee. There is no difference that your parents are dependent or not.

In case of senior citizen, quantum of deduction: An increased deduction of INR 50,000 (instead of INR 25,000) will be allowed in case any of the persons mentioned above is a senior citizen, an individual of the age of 60 years or more ,who is resident of India at any time during the relevant previous year.

(c) Deduction in respect of payment towards preventive health check-up: Section 80D endows that deduction to the extent of INR 5,000 shall be allowed in respect payment made on account of preventive health check-up of self, children, spouse or parents made during the previous year. However, the said deduction of INR 5,000 is within the overall limit of INR 25,000 or INR 50,000), specified in point (a) and point (b) above.

(d) Deduction for medical expense spent on senior citizens: Person of the age of 60 years or more and who is resident in India and who are not able to get health insurance coverage, deduction of upto would be allowed for any payment made on account of medical expense in respect of a such person.

The term Medical expense is not defined anywhere in the Act, but going by the motive, expense for medical should cover every medical expense whether or not these expenditure are covered under any health insurance policy. So, you can say that expenses like consultation fees, medicines, hearing aids etc. can be claimed as deduction.

(e) Mode of payment: Under section 80D, for claiming such deduction the payment can be made:

  • In respect of any sum paid on account of preventive health check-up, By any mode including cash
  • In all other cases, by any mode other than cash.

In Case of HUF:-

  1. In respect of premium paid to insure the health of any member of the family, deduction under this section is allowable.
  2. Maximum deduction available to a HUF would be INR 25000/- and in case any member is a senior citizen, INR 50000/-.
  3. Further, medical expenditure amount incurred on the health of any member of a family who is a senior citizen would qualify deduction subject to a maximum of INR 50, 000, provided no amount has been paid to affect any health insurance of such person.

What are the Conditions?

Premium can be paid by any mode, other than cash, in the previous year out of his/her income chargeable to tax.

Deduction where health insurance premium is paid in lump-sum [Section 80D (4A)]:-

In a case where insurance premium is paid in lump-sum for more than 1 year by:-

  1. Individual, to effect or keep in force an insurance on his health or health of his spouse, dependent children or parents; or
  2. HUF, to effect or keep in force an insurance on the health of any member of the family,

Then, the deduction which is allowed under this section for each of the relevant previous year would be equal to the appropriate fraction of such lump-sum payment.

What are the Points To Keep In Mind Before Investing?

  1. Contribution towards health insurance plan has to make to a scheme as specified by the Central Government approved by IRDA.
  2. Payment should be made by any mode except cash payment.
  3. Senior citizen: Senior citizen means an individual who is resident in India and are 60 yrs old or more during the relevant FY (financial year).
  4. Premium paid towards a brother, sister, grandparents, aunts, uncles or any other relative cannot be claimed as a deduction for taking tax benefit.
  5. Premium paid on behalf of working children cannot be taken for tax benefit.
  6. In the case of part payment by you and a parent, both of you can claim a deduction to the extent paid by each.
  7. Group Health Insurance premium provided by the company is not eligible for deduction.
  ScenarioPremium paid
Premium paid (Rs.)  Deduction under 80D (Rs.)
   Self, Family, ChildrenParents
Individual and parents below 60 yrs.INR 25,000INR 25,000INR 50,000
Individual and family below 60 yrs. but parents above 60 yrs.INR 25,000INR 50,000INR 75,000
Both individual, family and parents above 60 yrs.INR 50,000INR 50,000  INR 1,00,000
Members of Hindu Undivided FamilyINR 25,000INR 25,000INR 25,000
Non-resident individualINR 25,000INR 25,000INR 25,000