All about deduction towards Medi-claim payment u/s 80D

There are options beyond section 80D which the taxpayers dont realises. One such option is in the form of section 80D which offer deduction towards mediclaim payment.

The deduction is over and above deduction limit of Rs. 1.50 Lakh u/s 80C. Deduction u/s 80D is available towards Medical insurance premium (including preventive health check-up) and also towards medical expenditure. This deduction is available only to an Individual & HUF.

It must be noted that deduction is available only if the payment is done in cheque and no deduction shall be admissible if the payment is done in cash.

 

Let us know more about the deduction:

For Individual:

Following deductions are available to an individual –

1. Amount paid towards medical insurance premium or amount paid for preventive health check-up of the Taxpayers or his family(here family means spouse and dependent children) up to a maximum amount of RS.  25,000.

It should be noted here that in case of prevent health check-up maximum amount of RS.  5,000 is allowed as a deduction, however, the same is included in the overall maximum deduction of RS.  25,000.

2. Amount paid towards medical insurance premium or amount paid for preventive health check-up of parents of the Taxpayers up to a maximum amount of RS.  25,000.

It should be noted here that in case of prevent health check-up maximum amount of RS.  5,000 is allowed as a deduction, however, the same is included in the overall maximum deduction of RS.  25,000.

3. Amount paid towards medical expenditure for self or any member of the familyof the Taxpayers up to a maximum amount of RS.  50,000.
4. Amount paid towards medical expenditure for parents of the Taxpayers up to a maximum amount of RS.  50,000.

Following table can summarise the provision in easy way:

Persons covered	Type of payment	Maximum deductible amount
Taxpayers or spouse or dependent children	Medical insurance premium + Preventive Health Check-up	Rs. 25,000
Parents of the Taxpayers	Medical insurance premium + Preventive Health Check-up	Rs.  25,000
Taxpayers or spouse or dependent children	Medical expenditure	Rs.  50,000
Parents of the Taxpayers	Medical expenditure	Rs.  50,000

FOR HUF:

Following deduction is available to a Hindu Undivided Family (HUF) –

1. Amount paid towards medical insurance premium of any member of the Hindu Undivided Family up to a maximum amount of RS.  25,000.
2. Amount paid towards the medical expenditure of any member of the Hindu Undivided Family up to a maximum amount of RS.  50,000.

FOR INDIVIDUAL BEING A SENIOR CITIZENS:

[individual resident in India who is of the age of 60 years or more at any time during the relevant previous year].

The treatment of available deduction under section 80D is different in case of a senior citizen. The treatment of deduction in case of a senior citizen is explained in the below-mentioned table –

Category of Taxpayers	Senior citizen	Type of payment	Maximum deductible amount
Individual	Either Taxpayers or his family or both is a senior citizen	Medical insurance premium + Preventive Health Check-up	RS.  50,000
Individual	Either of the parents of the Taxpayers is a senior citizen	Medical insurance premium + Preventive Health Check-up	RS.  50,000
Hindu Undivided Family	Any member of the Hindu undivided family is a senior citizen	Medical insurance premium	RS.  50,000

MEDICLAIM PAYMENT IF MADE IN LUMPSUM:

In order to give corrective deduction in case of the insurance premium which is paid on the lump-sum basis, sub-section (4A) has been inserted to section 80D. It should be noted that the newly inserted sub-section (4A) to section 80D is effective from 1^st April 2019.

According to said sub-section, in case of a lump-sum payment of insurance premium, in a previous year to effect or to keep in force an insurance on the health of a specified person for more than a year, the deduction shall be allowed equal to the appropriate fraction of the amount for each of the relevant previous year.