Deduction towards Mediclaim policy under Section 80D: An overview

Deduction towards Mediclaim policy under Section 80D: An overview

 475 total views

Deduction towards Mediclaim policy under Section 80D: An overview

 
 
Section 80D provides for deduction towards mediclaim payment and preventive health check up payment. There are lot of confusion as to whether the limit is Rs. 25000 OR Rs. 50,000/-. Further, the doubt is there as to whether payment has to be done in cheque only or it can be done in cash also.
Further question are raised as to whether the deduction towards health insurance policy is in addition to own policy or not?
Let us know about it:
Section 80D which provides for Deduction in respect of health insurance premia reads as under:
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 as specified in sub-section (2B), 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 such other scheme as may be notified by the Central Government in this behalf or any payment made on account of preventive health check-up of the assessee or his family as does not exceed in the aggregate twenty-five 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 twenty-five thousand rupees;
(c) the whole of the amount paid on account of medical expenditure incurred on the health of the assessee or any member of his family as does not exceed in the aggregate fifty thousand rupees; and
(d) the whole of the amount paid on account of medical expenditure incurred on the health of any parent of the assessee, as does not exceed in the aggregate fifty thousand rupees:
Provided that the amount referred to in clause (c) or clause (d) is paid in respect of a senior citizen and no amount has been paid to effect or to keep in force an insurance on the health of such person:
Provided further that the aggregate of the sum specified under clause (a) and clause (c) or the aggregate of the sum specified under clause (b) and clause (d) shall not exceed fifty thousand rupees.
Explanation.—For the purposes of clause (a), “family” means the spouse and dependant children of the assessee.
(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), the 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 aggregate of the following, namely:—
(a) 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 twenty-five thousand rupees; and
(b) the whole of the amount paid on account of medical expenditure incurred on the health of any member of the Hindu undivided family as does not exceed in the aggregate fifty thousand rupees:
Provided that the amount referred to in clause (b) is paid in respect of a senior citizen and no amount has been paid to effect or to keep in force an insurance on the health of such person:
Provided further that the aggregate of the sum specified under clause (a) and clause (b) shall not exceed fifty thousand rupees.
(4) Where the sum specified in clause (a) or clause (b) of sub-section (2) or clause (a) of 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 “twenty-five thousand rupees”, the words “fifty thousand rupees” had been substituted
Above reading will make the following issues clear:
  1. Payment towards health insurance policy cannot be done in cash for getting deduction u/s 80D.
  2. Amount of preventive health check ups can be paid in cash.
  3. Aggregate overall limit of Rs. 50,000/- is there for deduction u/s 80D.
  4. The limit is Rs. 25000/- for taxpayers who are not senior citizens.
  5. The limit is Rs. 50,000/- for senior citizens taxpayers.

Leave a Comment

Your email address will not be published.

the taxtalk

online portal for tax news, update, judgment, article, circular, income tax, gst, notification Simplifying the tax and tax laws is the main motto of the team tax talk, solving