Section 80D of Income Tax Act, 1961: (Amendments made by Finance Act 2018 for May 2019/ Nov 2019 students)
  • 1. In respect of sum paid by an assessee in respect for himself or in respect of his family ( i.e. spouse and dependent children)
    • (a) Section 80Dprovides for deduction of payment of any sum made to keep in force insurance on the health (i.e. mediclaim) of the assessee or his family subject to a maximum of Rs. 25,000.
    • (b) Also, it provides for deduction for payment made for preventive health check-up of the assessee and his family which shall together with payment as referred in point(a) shall not exceed a sum of Rs. 25,000/-. However, an individual restriction of maximum 5,000/- has also been imposed for expenditure incurred on such health check-up.
    • (c) If the assessee himself or any of his family members is a senior citizen, the amount of deduction will be increased to Rs. 30,000/- as per the existing section 80D.
    • (d) Also for a verysenior citizen (assessee or family) who has not paid any amount for mediclaim and if he has made an expense for medical expenditure, the same is eligible for deduction upto Rs. 30,000/-.
    • (e) However, overall limit for claiming deduction shall not exceed Rs. 30,000/-.

However, vide Finance Act, 2018, such sum of Rs. 30,000/- as mentioned in point (c)(d)and (e) is substituted with Rs. 50,000/- w.e.f from FY 2018-19.Hence, now deduction of Rs. 50,000 will be available if the assessee or any of his family members is a senior citizen. Also, very senior citizen as referred to in point (d) is substituted with senior citizen. Hence, medical expenditure can be claimed even if the age exceeds 60 provided no deduction of medical insurance of such person is being claimed in section 80D and the assessee is a Resident in India.

  • 2. In respect of any sum paid by an assessee in respect of his parents, deduction is allowed separately under section 80D. The limits are similar to the above. Finance Act, 2018 has amended the limit of Rs. 30,000 to Rs. 50,000 for a senior citizen and in case of medical expenditure, deduction has now been allowed even to a Senior citizen.
  • 3. Further in case of assessee being a HUF, it is eligible for deduction of Rs. 25,000/- or sum incurred or 50,000/- as the case may be for keeping in force the medical insurance (i.e. mediclaim) of its members. Note that payment of health check-up expense having a limit of Rs. 5000 across all categories is allowed to paid in cash. For other expenses, payment in cash is not allowed.

     

    Examples:
    Person for which incurred Premium Mode Allowed Reason
    Self – age 65 28,000 (Checkup- 5000) Cash 5000 For preventive health checkup, cash is allowed
    Sister 4000 Cheque 0 Sister is not ‘family’
    Dependent son- Age 50 Self- age 72 Spouse- age 70 (Medical expenditure only) 4000 40000 5000 Credit card Credit card Credit card 49,000 The overall limit has now been amended to Rs. 50,000. Deduction of medical expenditure is allowed since medical insurance is not taken. The amended age limit is 60.

     

    MCQ: (Join instagram channel- revise_with_himal for more MCQs)
    Mr. A incurs medical insurance expense for himself (Age- 44) of 15,000. He incurs Rs. 40,000 for his mother (Age- 66) on medical expenditure (medical insurance was not taken). He incurs 15,000 on medical insurance of his father (Age-68). Health check-up expense incurred on himself was 3000 and on his father- Rs. 2000. Deduction under section 80-D as amended by Finance Act 2018 will be available of:
    a. 68,00 b. 70,000
    c. 75,000d. 48,000

     

    Correct answer : (a)

     

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