Deduction is available up to Rs. 20,000/- for senior citizens and upto Rs. 15,000/ in other cases for insurance of self, spouse and dependent children. Additionally, a deduction for insurance of parents (father or mother or both) is available to the extent of Rs. 20,000/- if parents are senior Citizen and Rs. 15,000/- in other cases. Therefore, the maximum deduction available under this section is to the extent of Rs. 40,000/-. From AY 2013-14, within the existing limit a deduction of upto Rs. 5,000 for preventive health check-up is available.
Exemption—S. 14A, 37(1), 80D—IT ACT, 1961—HOSHANG D. NANAVATI vs. ASSISTANT COMMISSIONER OF INCOME-TAX [2012] 16 ITR (Trib) 614 (ITAT-MUMBAI)
Amendment in S. 80D relating to deduction in respect of health insurance premia:
Hike in deduction limit for mediclaim:
Clause 18 of the Bill seeks to amend S. 80D of the Income-tax Act relating to deduction in respect of health insurance premia.
It is proposed to amend the said section so as to raise the limit of deduction from fifteen thousand rupees to twenty-five thousand rupees.
It is also proposed to define a ‘very senior citizen’ to mean an individual resident in India who is of the age of eighty years or more at any time during the relevant previous year.
It is further proposed to raise the limit of deduction in respect of senior citizens or very senior citizens from twenty thousand rupees to thirty thousand rupees.
It is also proposed to provide that any payment made on account of medical expenditure in respect of a very senior citizen, if no payment has been made to keep in force an insurance on the health of such person, as does not exceed thirty thousand rupees shall be allowed as deduction u/s 80D.
It is also proposed to provide that the aggregate of the deduction on account of health insurance premium and the medical expenditure in respect of the assessee or his family would not be more than thirty thousand rupees. Similarly, such aggregate deduction in respect of the parents is also proposed to be not more than thirty thousand rupees.
These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent years.
Reference:
As Per Section 80D, of the Finance bill, 2015-
Amendment of section 80D.
In section 80D of the Income-tax Act, with effect from the 1st day of April 2016,—
(A) in sub-section (2), after clause (b), the following shall be inserted, namely:—
“(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 thirty 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 thirty thousand rupees:
Provided that the amount referred to in clause (c) or clause (d) is paid in respect of a very 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 thirty thousand rupees.”;
(B) for sub-section(3), the following sub-section shall be substituted, namely:—
“(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 thirty thousand rupees:
Provided that the amount referred to in clause (b) is paid in respect of a very 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 thirty thousand rupees.”;
(C) in sub-section(4), —
(i) for the words, brackets and figure “or in sub-section (3)”, the words, brackets, letter and figure “or clause (a) of sub-section (3)” shall be substituted;
(ii) after the words “senior citizen,”, the words “or a very senior citizen,” shall be inserted;
(iii) for the words “fifteen thousand rupees”, the words “twenty-five thousand rupees” shall be substituted;
(iv) for the words “twenty thousand rupees”, the words “thirty thousand rupees” shall be substituted;
(v) the Explanation shall be omitted;
(D) after sub-section (5), the following Explanation shall be inserted, namely:—
‘Explanation.—For the purposes of this section,—
(i) “senior citizen” means an individual resident in India who is of the age of sixty years or more at any time during the relevant previous year;
(ii) “very senior citizen” means an individual resident in India who is of the age of eighty years or more at any time during the relevant previous year.’.
As Per Section 80D, of the Income Tax Act, 1961-
Deduction in respect of health insurance premium.
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 fifteen 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 fifteen thousand rupees.
- —for the purposes of clause (a), “family” means the spouse and dependent 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 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 fifteen thousand rupees.
(4) Where the sum specified in clause (a) or clause (b) of sub-section (2) or in 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 “fifteen thousand rupees”, the words “twenty thousand rupees” had been substituted.
- —for the purposes of this sub-section, “senior citizen” means an individual resident in India who is of the age of [sixty years] or more at any time during the relevant previous year.
(5) The insurance referred to in this section shall be in accordance with a scheme made in this behalf by—
(a) the General Insurance Corporation of India formed under section 9 of the General Insurance Business (Nationalisation) Act, 1972 (57 of 1972) and approved by the Central Government in this behalf; or
(b) any other insurer and approved by the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999).