DEDUCTION U/S 80D MEDICLAIM POLICY (HEALTH POLICY) PREVENTIVE HEALTH CHECK UP

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Deduction under section 80D is available for medical claim policy By individual for family and HUF for their members . Other details regarding 80D and medical insurance there under is given below
  1. Addition to section 80 C:Section 80D is available other than 100000 deduction available under 80C for life insurance,ppf,gpf,tuition fee,ULIP,House loan repayment etc.
  2. Insurer covered:This deduction is available for medical claim policy which should be framed in this behalf by
    • by GIC(General insurance Corporation) or by
    • any other insurer but approved by IRDA(Insurance Regulatory Development authority)
  3. Available to :Deduction is available to 
    • Individual (resident or non resident ,Indian Citizen or foreign citizen)
    • HUF(Hindu undivided Family may be resident or non resident)
  4. Mode of payment:Insurance Premium should be paid by any mode other than by Cash .Means if insurance premium is paid by cash then deduction is NOT available.Before Assessment year 2008-09 ,only payment by cheque was allowed under this section but from Ay  2008-09 onwards the deduction is allowed by other mode also like online payment which is now a days is very popular or by credit card is also allowed.
  5. Out of Income :The amount should be paid out of the income chargeable to tax.
  6. Proposer of the policy is not must:The premium is to be paid to effect or keep inforce insurance policy  ,there is no condition that assessee should be the proposer of the policy ,
  7. Partly contribution: Assessee can  partly contribute the premium amount but amount should be paid directly to insurance company and paid through mode other than by cash (see example)
  8. Insurance cover on?:First deduction given below :Insurance Premium may be paid for medical claim insurance policy for assessee himself or spouse or dependent children or any combination of three.
  9. Addition for parents:Second deduction given below:Insurance premium may be paid for medical claim insurance for assessee parents (father or mother or for both)(whether depended or not)
  10. Deduction upto 40000:Theoretically ,maximum deduction can be claimed for Rs 40000.(detail as given below)
  11. Deduction of Preventive health checkup :A sub limit of 5000/- has been allowed wef financial year 2012-13 for preventive health check up for self ,spouse and dependent children and parents whether dependent on assessee or not.Preventive health check up amount  can be paid through any mode including cash mode(read more about preventive health check up u/s 80D up to 5000/-)
Amount Of deduction  : Two type of Deductions are available to Individuals under this section from  Assessment year 2009-10 onwards (also available in in current financial year 2012-13)

Sl. No.
Persons for whom payment made
Nature of payment
Mode of payment
Allowable Deduction (in Rs.)
1
Employee or his family
    the whole of the amount paid to effect or to keep in force an insurance on the health of the employee or his family or
  any contribution made to the CGHS or
  any payment on account of preventive health check-up of the employee or family, [restricted to Rs. 5000/-; cash payment allowed here]
any mode other than cash








Cash mode is also allowed
Aggregate allowable is Rs. 15,000/{For Senior Citizens it is Rs. 20000/-}.
2
Parent or Parents of employee
(whether depended on assessee or not)
    the whole of the amount paid to effect or keep in force an insurance on the health of the parent or parents of the employee or
    any payment made on account of preventive health check-up of the parent or parents of the employee [restricted to Rs. 5000/-; cash payment allowed here]
any mode other than cash






Cash payment allowed
Aggregate allowable is Rs. 15,000/ than {For Senior cash Citizens it is Rs. 20000/-}


Deduction to HUF: Deduction to HUF is available on insurance premium paid for policy taken for  of any member of the  HUF

Addition deduction for Resident Senior Citizen:In addition to two point above,  additional deduction of Rs 5000 is available where assessee or his spouse (wife or husband) or dependent children and parents(whether depended or not) or any member of the family in case one and father or mother is a resident in India and a senior  citizen in case two.And same in the case of HUF assessee if policy  has been taken on member which is senior citizen than additional Rs 5000/- deduction is available also to HUF.

Senior citizen means who is at least of 65 year of age or more at any time during the previous year.
Update : Age Limit for Senior Citizen has been proposed to be reduced to 60 Year wef financial year 2012-13 through Finance Bill 2012

Example : An individual assessee pays (through any mode other than by cash) during the previous year medical insurance premium as under
  1. Rs 12000/- to keep in force an insurance policy on his health and on his wife and dependent children
  2. Rs 17000/- to keep in force an insurance policy on the health of his parents.
According to above provisions he will be allowed of Rs 27000/-(12000/- +15000/-) if neither of his parents is senior citizen .however if any of his parent is a resident senior citizen ,he will be allowed a deduction of 29000(12000+17000) .whether the parents is dependent or not is not a consideration for deciding the deduction under section 80D(from assessment year 2009-10 )(previous year 2008-09)

Further, in the above example ,if cost of insurance on the health of the parents is 30000/- out of which Rs 17000/- is paid (by any non cash mode) by the son and rs 13000/- by the father (who is senior citizen), out of their respective taxable income ,the son get the deduction of Rs 17000/- (in addition to deduction of Rs 12000/- for the medical insurance on self and family) and the father will get deduction under section Rs 13000/-
(Example as given in Finance Act 2008)

Deduction of Preventive health checkup :A sub limit of 5000/- has been allowed wef financial year 2012-13 for preventive health check up for self ,spouse and dependent children and parents(whether depended or not) .Preventive health check up amount  can be paid through any mode including cash mode(read more about preventive health check up u/s 80D up to 5000/-)

Hope it will be now easy to understand the section 80D deduction.

Related Topics,.
  1. Deduction u/s 80 C under who's name cab be done =
    1. Life insurace
    2. Tuition fess,
    3. House loaN repayment
  2. Deduction u/s 80DDA:Deduction for medical treatment
  3. Deduction u/s 80 E:Deduction for Higher Education
  4. Deduction u/s 80GG:Deduction for rent where no HRA received
  5. Exemption for HRA
  6. Exempted & Taxable allowances.

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