Medical Expense Deduction Claim under Income Tax Act

Dec 07, 2018 | 4 months ago | Read Time: 3 minutes | By Rajan Gupta

There is general perception in taxpayers that they can claim only medical –health insurance premium under section 80D of the Income tax act but Finance Minister has tweaked the provisions of the little bit in Finance Act-2018 and now medical expenses paid in other than cash mode for resident senior citizens also eligible for deduction under this section. This provision is applicable from financial year 2018-19 earlier this provision was applicable only for very senior citizens age more than 80 years or more. This provision has been amended since insurance premium for senior citizen are on higher side and it is better if deduction is made available for medical expenditure than medical insurance for them. The upper Limit for deduction is Rs 50,000. Preventive health checks expenses up to Rs 5,000 can also be claimed as deduction within the upper limit prescribed.

A Summary of current provision of deduction for Health insurance and medical expenditure is tabulated as under.

DEDUCTION U/S 80D MEDICAL INSURANCE PREMIUM AND MEDICAL EXPENSES

Persons for whom payment made

Individual or his family

Parents of the Individual

BOTH

Nature of payment

Medical insurance premium

Medical expense

Medical insurance premium

Medical expense

Preventive Health check up

Maxi Deduction (if not a senior citizen)

 Rs 25,000/

NIL

 Rs 25,000/

NIL

 Rs 5000/-

Maximum Deduction (For senior citizen)

Rs 50000/-

Rs 50000/-

Rs 50000/-

Rs 50000/-

 Rs 5000/-

Cash Payment allowed

NO

NO

NO

NO

YES

Medical expenditure allowed only if no expenses incurred on medical insurance

 

If assesse himself or his family member is a senior citizen and he is also incurring expenses for medical treatment of their parents then he can claim Rs 10000 total deduction under this section (Rs 50000 himself and Rs 50000 parents)

Other salient provisions of this section are as under.

  1. Individual assesse can claim deduction for medical insurance premium paid or any contribution made to the CGHS or such other scheme as may be notified by Central Government for himself and family up to maximum Rs 25000/-
  2. The Insurance premium must be paid in mode other than cash.
  3. Out of Rs 25000/- Limit prescribed above in sr no-1 , Rs 5000 can be claim for amount paid for preventive health checkup ,which can be paid in any mode including cash.
  4. If the Individual assesse is resident senior citizen then
    1. The upper limit of Rs 25000 will be increased to Rs 50000
    2. Assesse can claim alternative deduction for medical treatment instead of medical insurance.
  5. Meaning of Family: “Family” means the spouse and dependent children of the assesse so deduction is not available for brother /sisters even dependent on assesse.
  6. Additional deduction for parents: In addition to limits given in sr no 1-5 above, if assesse paid any health insurance premium for his parents (whether dependent on him or not) he can claim a deduction of Rs 25000/-. And if their parents are senior citizens then he upper limit will be Rs 50000/- and he can also eligible to claim medical treatment expenses under this section.
  7. HUF can also claim deduction of Rs 25000 for medical insurance premium for its members and if expenses are incurred for a senior citizen member then not only medical insurance but also medical expenses can be claimed under this section and limit will also be increased to Rs 50000/-
  8. If Insurance premium is paid for more than one-year period then assesse can claim deduction in respective years on pro-rata basis.

Calculate premium for your Term Plan

  • Y N
    • Annual Income
    • Sum Assured
    • Select Cover Upto Age
    • Name
    • Mobile
    • Email ID
Your Annual Premium for Aegon Life iTerm Insurance Plan
Prev
Blockchain and Smart Contracts – Solutions for Our Future in Finance
Next
Section 80GG Deduction Under Income Tax Act

RELATED ARTICLES