Section 80D: deduction for health insurance premium and medical expenditure (as set, 1961 Act, AY 2019-20)

Who can claim

An individual or a Hindu undivided family may deduct from gross total income the sums described below, paid in the previous year out of income chargeable to tax (section 80D(1)). For assessment year 2019-20 the section stands as amended by the Finance Act, 2018, with effect from 1 April 2019.

What is covered and the limits

For an individual (section 80D(2)):

1. Self, spouse and dependent children (clause (a)): premium to insure their health, contribution to the Central Government Health Scheme or another notified scheme, and payments for a preventive health check-up, up to ₹25,000 in all; ₹50,000 where the person insured is a senior citizen (section 80D(4)).
2. Parents (clause (b)): premium to insure the health of either or both parents, and payments for their preventive health check-up, up to a further ₹25,000; ₹50,000 if a parent is a senior citizen.
3. Medical expenditure on a senior citizen with no health insurance (clauses (c) and (d)): actual medical expenditure on the health of the assessee or a family member, or on a parent, where no premium is paid for that person, up to ₹50,000 for each group; the insurance and the medical expenditure of a group together may not exceed ₹50,000 (second proviso to section 80D(2)).
4. Preventive health check-up is allowed within these limits only up to ₹5,000 in all for the family and the parents together (section 80D(2A)).

A senior citizen here is a resident individual who is 60 or more at any time in the year (Explanation to section 80D). For a Hindu undivided family the same limits apply to premium and medical expenditure for its members (section 80D(3)).

Conditions

• Mode of payment: any mode other than cash, except that a preventive health check-up may be paid in cash (section 80D(2B)).
• Approved insurer: the insurance must be under a scheme of the General Insurance Corporation approved by the Central Government, or of another insurer approved by the Insurance Regulatory and Development Authority (section 80D(5)).
• Premium for more than one year: where a lump sum is paid for a policy running for more than a year, only an equal share is deducted in each year of cover (section 80D(4A)).

Example (our own figures)

Mr. Raghav, aged 45, pays by card ₹22,000 premium for his family and ₹4,000 in cash for their health check-up; he also pays by cheque ₹38,000 premium for his father, aged 68. Deduction: family ₹25,000 (₹22,000 + ₹3,000 of the check-up, the family limit being reached) and father ₹38,000 (within the ₹50,000 limit for a senior citizen): ₹63,000 in all.