Background – Deduction in respect of health insurance premium:
Post covid scenario, People are buying health insurance policy. You may have also purchased health insurance policy for the first time and wondering how to claim deduction in respect of health insurance premium paid under section 80D of the Income Tax Act, 1961. This article will guide to claim deduction u/s 80D .
Summary for deduction in respect of health insurance premium paid under section 80D :
| Particulars | Case-1 | Case-2 | Case-3 | |||
| Self & Family (no one of them is a senior citizen) | Parents (no one of them is a senior citizen) | Self & Family (no one of them is a senior citizen) | Parents (at least one of them is a senior citizen) | Self & Family (at least one of them is a senior citizen) | Parents (atleast one of them is a senior citizen) | |
| Medical Insurance etc* | 25,000 | 25,000 | 25,000 | 50,000 | 50,000 | 50,000 |
| Medical Expenditure** | — | — | — | 50,000 | 50,000 | 50,000 |
| Maximum deduction allowable | 25,000 | 25,000 | 25,000 | 50,000 | 50,000 | 50,000 |
| Aggregate amount of deduction allowable under section 80D | 50,000 | 75,000 | 1,00,000 | |||
Notes:
* Includes (i) contribution to the Central Government Health Scheme notified scheme for self & family; and (ii) amount paid for preventive health check-up up to Rs. 5,000/-. Don’t forget to claim this amount up to Rs.5,000 towards preventive health check in case total amount including health premium and medical expenditure doesn’t exceeds aggregate amount as mentioned in above table .
** Allowable only if no amount is paid for medical insurance.
Note 1 : The payment for preventive health check-up can only he made in cash, other payments must be made by non-cash mode.
Note 2 : Finance Act, 2018 amended section 80D of the Act to provide that in case of single premium health insurance policy having cover of more than one year, the deduction shall be allowed on proportionate basis for the number of years for which health insurance cover is provided, subject to the monetary limits specified above.
Definitions:
| (i) | “family” means the spouses and dependent children of the employee | |
| (ii) | “Senior citizen” means an individual resident in India who is of the age of sixty years or more at any time during the relevant previous year. |
The DDO must ensure that the medical insurance referred to above 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 (Nationalization) Act 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. |
Lump sum payment of health insurance premium:
In case, a lump sum amount is paid to effect or To keep in force an insurance on health for more than a year, proportionate deduction (appropriate fraction) will be allowable for the year in which it was paid and for subsequent year/years in accordance with sub section (4A) of Section 80D.
Hope you have got clarity that how to claim deduction in respect of health insurance premia paid under section 80D of Income Tax Act,1961.
Click on below link to check Deduction u/s 80TTA and 80TTB on interest .Section 80TTA & 80TTB-How to earn tax free interest
Author
-
by
-
