In this post we will discuss the provisions related to section 80D.If you have a query or want to add something to the given matter then please add in the comment section.
- Addition to section 80 C:Section 80D is available other than 100000 deduction available under 80C for life insurance,ppf,gpf,tuition fee,ULIP,House loan repayment etc.
- Insurer covered:This deduction is available for medical claim policy which should be framed in this behalf by
- by GIC(General insurance Corporation) or by
- any other insurer but approved by IRDA(Insurance Regulatory Development authority)
- Available to :Deduction is available to
- Individual (resident or non resident ,Indian Citizen or foreign citizen)
- HUF(Hindu undivided Family may be resident or non resident)
- Mode of payment:Insurance Premium should be paid by any mode other than by Cash .Means if insurance premium is paid by cash then no deduction is available.Before Assessment year 2008-09 ,only payment by cheque was allowed under this section but from Ay 2008-09 onwards the deduction is allowed by other mode also like online payment which is now a days is very popular or by credit card is also allowed.
- Out of Income :The amount should be paid out of the income chargeable to tax.
- Proposer of the policy is not must:The premium is to be paid to effect or keep inforce insurance policy ,there is no condition that assessee should be the proposer of the policy ,
- Partly contribution: Assessee can partly contribute the premium amount but amount should be paid directly to insurance company and paid through mode other than by cash (see example)
- Insurance cover on?:First deduction given below :Insurance Premium may be paid for medical claim insurance policy for assessee himself or spouse or dependent children or any combination of three.
- Addition for parents:Second deduction given below:Insurance premium may be paid for medical claim insurance for assessee parents (father or mother or for both)
- Deduction upto 40000:Theoretically ,maximum deduction can be claimed for Rs 40000.(detail as given below)
: Two type of Deductions are available to Individuals under this section from Assessment year 2009-10
- Deduction on Medical insurance premium paid for himself,spouse,dependent children =Rs 15000 maximum.
- Deduction on Medical insurance premium paid for parents ,whether dependent on assesee or not =Rs 15000 maximum
Addition deduction for Resident Senior Citizen:In addition to two point above, additional deduction of Rs 5000 is available where assessee or his spouse (wife or husband) or dependent parents or any member of the family in case one and father or mother is a resident in India and a senior citizen in case two.And same in the case of HUF assessee if policy has been taken on member which is senior citizen than additional Rs 5000/- deduction is available also to HUF.
Senior citizen
means who is at least of 65 year of age or more at any time during the previous year.
Example : An individual assessee pays (through any mode other than by cash) during the previous year medical insurance premium as under
- Rs 12000/- to keep in force an insurance policy on his health and on his wife and dependent children
- Rs 17000/- to keep in force an insurance policy on the health of his parents.
Further, in the above example ,if cost of insurance on the health of the parents is 30000/- out of which Rs 17000/- is paid (by any non cash mode) by the son and rs 13000/- by the father (who is senior citizen), out of their respective taxable income ,the son get the deduction of Rs 17000/- (in addition to deduction of Rs 12000/- for the medical insurance on self and family) and the father will get deduction under section Rs 13000/-
(Example as given in
FinanceAct 2008)
Hope it will be now easy to understand the section 80D deduction.
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