Section 80D

This query is : Resolved

Tilak Agrawal (Querist)
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09 January 2009 Sir/Madam

My Previous Query was , Does the Maximum Limit Under Section 80D is Rs 20000 or it is more than that.
To Be more Clear i am giving following illustration.
Mr. X Invested Following in Medi claim Insurance.
Himself - 17000/-Rs
Dependant Wife-15000/-Rs.
Father Dependant(Senior Citizen)- 22000/-
Does Mr. X can Claim Rs 35000/-(i.e 15000/-rs on his policy and his wife's policy + Rs.20000/-on his father policy) or He can Claim Rs. 50,000/-or the maximum limit is 20000/-. for the assesment year 2009-2010.

CA Hemant T Dewani

CA Hemant T Dewani (Expert)
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09 January 2009
SECTION 80D DEDUCTION IN RESPECT OF MEDICAL INSURANCE PREMIUM

Persons Covered

Individual/HUF.

Eligible Amount

Premium paid on Mediclaim Policy issued by General Insurance Corporation or any other insurer approved by IRDA (Insurance Regulatory and Development Authority).

Relevant

Conditions/Points

1.

The aforesaid premium is paid by cheque (may be crossed/ bearer/ account payee)
2.

In case of Individual it is taken for Insurance on the health of the Self, Spouse, Dependant Parents or children of the assessee in the case of Individual OR in case of HUF Insurance is taken on the health of any member of the family.

Extent of Deduction

*

100% of premium paid subject to ceiling of (a) Rs. 20,000/- in the case of premium paid in respect of Resident Senior citizen (who has attained the age of 65 years or more) or (b) Rs. 15,000/- in other cases; and
*

From AY 2009-10, additional deduction of an amount equal to (a) Rs. 20,000/- (If Resident Senior Citizen) or (b) Rs. 15,000/- in other cases wherein, Premia is paid either by the assessee himself towards Medical Insurance for Parents (whether dependent or not) or is paid by the Parents themselves.

Illustration

* For Example, an individual assessee pays (by bearer or crossed cheque) during the previous year medical insurance premia as under:
i. Rs 12,000/- to keep in force an insurance policy on his health and on the health of his wife and dependent children;
ii. Rs 17,000/- to keep in force an insurance policy on the health of his Parents.

* As per the Provisions relevant to AY 2008-09 the individual assessee was allowed a deduction of Rs 15,000 (Rs. 12,000 + Rs. 3,000) if neither of his parents is a resident senior citizen.
However, if any of his parents is a resident senior citizen, he would be eligible to get a deduction of Rs 20,000 (Rs.12, 000 + Rs.8, 000). In case if the premia was paid by the parents themselves then deduction under this section was not claimable by the parents since it was necessary pre-condition that Parents are dependent on the assessee and the assessee in turn pays the medical premia and not the parents themselves.

However,

Under the Provisions relevant to AY 2009-10 the individual assessee will be allowed a deduction of Rs 27,000 (Rs. 12,000 + Rs. 15,000) if neither of his parents is a resident senior citizen.
In case any of his parents is a senior citizen, he will be allowed a deduction of Rs 29,000 (Rs.12, 000 + Rs.17, 000). Further, in the above example, if cost of insurance on the health of the parents is Rs 30,000, out of which Rs 17,000 is paid by the son and Rs 13,000 by the father (who is a senior citizen), out of their respective taxable income, the son will get a deduction of Rs 17,000 (in addition to the deduction of Rs 12,000 for the medical insurance on self and family) and the father will get a deduction of Rs 13,000.