Deduction of medical insurance premium- section 80D
Payment for Medical Insurance Premium under section 80D is allowed only to an individual (resident / non resident/ Indian citizen/ foreign citizen) or a Hindu undivided family (resident/ non resident).Note that medical insurance policy refers to mediclaim policies (where you submit bills and get re-imbursement). Fixed benefit policies like personal accident and critical illness policies do not qualify for this deduction.
Which payments qualify for deduction under Section 80D?
Payment is made towards premium for mediclaim policy.
Also note that from financial year 2013-14 onwards, in case of the individual taxpayer, following payment also qualifies for the deduction:
•Payment made to the Central Government Health Scheme, and
•Preventive health check-up will also qualify towards this deduction.
Can the premium be paid in cash?
For medical insurance premium, you have to pay by a mode other than cash (e.g. credit card, cheque, net banking etc.). If you pay by cash, deduction under Section 80D is not allowed.
However, payment on account of preventive health check-up can be made by any mode (including cash).
The deductions one can get under Section 80D are:
Individual can make payment for wife or husband or dependent children and deduction shall be allowed equal to the amount paid but subject to a maximum of Rs 15,000 but in case of senior citizen deduction shall be allowed upto Rs. 20,000.
If the individual has taken policy in the name of parents (dependent or independent), additional deduction shall be allowed to the extent of the premium paid but maximum Rs15,000, however, if the policy has been taken in the name of senior citizen, deduction shall be allowed to the extent of Rs20,000.
Deduction for preventive health check up shall be maximum Rs5,000 in aggregate. For self, spouse, dependent children and parents.
Hindu undivided family can take the policy in the name of any of its member and deduction shall be allowed in the similar manner.
Definition of senior citizen as per Income Tax Act
Senior citizen means is a resident individual and whose age at any time during the year should be at least 60 years.
No one can claim deduction under Section 80D for mediclaim premium payment for my in-laws. You can only claim for parents.
One can submit bills for preventive check-up test reports in excess of Rs. 5,000 to his/her employer and claim it under “medical reimbursement
