One of the most common expenditure of the general public is on medical/health insurance. Deduction regarding health insurance is allowed if health insurance premium is paid during the previous year out of income chargeable to tax and it is paid by any mode other than in cash. Deduction regarding health insurance is allowed to individuals and HUF's. It is allowed in respect of medical/health insurance premium paid towards notified schemes taken up in respect of specified persons as follows:
A) Payment by Individual
For: Self, Spouse, dependent children
Eligible Schemes
(a) Medical Insurance Policy of GIC (Approved by Central Govt.) or of any other insurer approved by IRDA; or
(b) Contribution to Central Govt. Health Scheme,or such other health schemes as may be notified by Central Government.
(c) Preventive health check-up
For: Parent/Parents
Eligible Scheme
(a) Medical insurance premium of GIC (approved by Central Govt.) or of any other insurer approved by IRDA
(b) Preventive health check-up
B) Payment by H.U.F.
For: Any member or members of H.U.F.
Eligible Scheme
Medical Insurance Policy of GIC (approved by Central Govt.) or of any other insurer approved by IRDA
The full concept of medical insurance has been explained under following sections:
I. Medical Insurance Policy or Policies of individual, spouse and dependent children and contribution made to CGHS
Least of 2 amounts shall be allowed as deduction :
(1) Actual premium deposited in any mode other than cash regarding medical insurance policy hr policies of assessee, his/her spouse and all dependent children put together and preventive health check up amount upto Rs. 5,000 only and contribution made to CGHS. OR
(i) Rs. 25,000 (in case of senior citizen Rs. 50,000).
II. Medical Insurance Policy or Policies of parent or parents
Least of 2 amounts shall be allowed as deduction:
Actual premium deposited in any mode other than cash regarding medical insurance policies of parent/parents and preventive health check-up. Parents may or may not be dependent upon the assessee. OR
(ii) Rs. 25,000 (in case of senior citizen Rs. 50,000).
III. Medical Insurance Policy taken by H.U.F.
In case of H.U.F, deduction under section 80D shall be the amount of medical insurance premium paid in any mode other than cash on the health of any member of H.U.F. as does not exceed in the aggregate Rs. 25,000 ( Rs. 50,000 in case of senior citizen).
Deduction regarding parents shall be allowed in addition to the deduction available to the assessee for the medical insurance of self, spouse and children. With effect from the assessment year 2014-15, any amount paid to effect health insurance through
such other schemes as notified shall also be eligible for deduction under this section within the existing limits.
IV. Medical Expenditure of senior citizen (Age 60 years or above]
In case a senior citizen has not got health insurance coverage (sometimes insurance companies do not provide such coverage to senior citizens), a deduction upto a maximum of 50,000 shall be allowed regarding any payment made on account of medical expenditure incurred in respect of a senior citizen. In case one parent has been medically insured and the other being senior citizen is not medically insured but has to incur medical expenses, the aggregate deduction regarding health insurance premium and medical expenditure incurred will be allowed but is shall be limited to Rs. 50,000.
For this section please note that-
- 'Senior Citizen' means an individual resident in India who is of the age of 60 years or more at any time during the relevant previous year.
- 'Family' means the assessee's spouse and dependent children.
Moreover, in case a single premium health insurance policy is taken, covering more than one year, the deduction shall be allowed on a proportionate basis, subject to the specified monetary limits as explained above.
Table showing deduction available to an individual taxpayer
| Category | Age Limit | Deduction for self & family | Deduction for parents | Preventive Health check-up | Maximum Deduction |
| Self & Family | (below 60 years) | 25,000 | - | 5,000 | 25,000 |
| Self & Family + Parents | (all below 60 years) | 25,000 | 25,000 | 5,000 | 50,000 |
| Self & Family + Parents | Self & Family (below 60 years) & Parents (above 60 years) | 25,000 | 50,000 | 5,000 | 75,000 |
| Self & Family + Parents | (above 60 years) | 50,000 | 50,000 | 5,000 | 1,00,000 |
| Members of HUF | (below 60 years) | 25,000 | 25,000 | 5,000 | 25,000 |
| Members of HUF | (above 60 years) | 50,000 | 50,000 | 5,000 | 50,000 |
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