sec 80d of income tax act

Can you claim medical expenses under Sec 80D?

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Last Updated on July 4, 2020 by Ravi Sankar Robbi

Can you claim medical expenses under Sec 80D?

Did you know the medical expenses incurred by you also helps in tax saving under sec80D?

Yes. Not only the medical insurance premium but also medical expenditure incurred makes you eligible for tax saving. Moreover, you can claim an additional deduction for the medical expenses incurred for your parents too under the sec 80D.

Let’s see what all the medical expenses you can claim under sec 80D of Income Tax Act, 1961.

Table of Contents

What is Sec 80D?

Sec 80D of the Income Tax Act, 1961 provides the deduction towards the certain expenditure incurred for the medical purposes by the Individuals & HUF. This deduction is in addition to the deduction available under Sec 80C of the Income Tax Act. So, you can claim a deduction for life insurance premium under Sec 80C and deduction for medical insurance premium/medical expenses under Sec 80D.

The key benefit of this section is, if you can afford to secure the health needs of your family by taking a medical insurance policy, you are eligible for claiming deduction too under this section subject to certain conditions mentioned below.

So, on one hand you can protect your family and on the other hand you can save your tax burden too.

Who Can Claim Deduction under sec 80D?

Individual or HUF

Individual – Expenditure such as Medical Insurance Premium, Preventive Health Check-up expenses & Medical expenditure can be incurred either for the benefit of Self & Family (Family includes Spouse & Dependent children) or for the Parents (either dependent or independent) of such an individual.

Any such expenditure incurred for the benefit of Brothers, Sisters, Father-in-Law, and Mother-in-Law of an individual is NOT eligible for deduction under Sec 80D.

NRI’s (Non-Resident Indians) also can claim deduction under this section.

The maximum deduction* that you can claim for Self & Family under Sec 80D is Rs. 50,000 (i.e. deduction for Medical Insurance Premium + Preventive Health Check-up expenses + Medical expenditure should NOT exceed Rs. 50,000)

The maximum deduction* that you can claim for Parents under Sec 80D is Rs. 50,000 (i.e. deduction for Medical Insurance Premium + Preventive Health Check-up expenses + Medical expenditure should NOT exceed Rs. 50,000)

Hence, the total maximum deduction for any individual (i.e. For Self & Family and For Parents) under section 80D is Rs. 1,00,000

* “Maximum deduction” is the limit beyond which you cannot claim the deduction. If your expenditure is less than such maximum deduction, you are eligible for deduction up to the expenditure incurred but not the maximum deduction specified.
Don’t get confused with the terms “deduction” & “maximum deduction”

HUF – Expenditure towards Medical insurance policy or any kind of medical expenses can be incurred for the benefit of ANY member of HUF.

What can be claimed as a deduction under Sec 80D and how much?

Individuals

The following expenditure can be claimed as deduction

  1. Medical insurance premium
  2. Preventive health check-up expenditure
  3. Medical expenditure

A. Medical Insurance Premium

It is a premium paid towards any medical insurance scheme.

For Self & Family

The given below are the medical insurance policies which are qualified for deduction.

(i) Any medical insurance policy framed by GIC & approved by Central Govt (or)

(ii) Any medical insurance policy framed by any other insurer & approved by Central Govt (or)

(iii) Contribution towards CGHS [Central Govt Health Scheme)

So, any amount paid as a medical insurance premium for the above-mentioned policies will be qualified under this section subject to the limits given below.

ParticularsMaximum deduction for Medical Insurance Premium
All individuals (i.e. Self & Family*) age is below 60 yearsRs. 25,000
Any of the individual (i.e. Self & Family*) age is 60 years or moreRs. 50,000
* Family includes Spouse and Dependent Children

For Parents

Similarly, the given below are the medical insurance policies which are qualified for deduction towards Parents

(i) Any medical insurance policy framed by GIC & approved by Central Govt (or)

(ii) Any medical insurance policy framed by any other insurer & approved by Central Govt

So, any amount paid as a medical insurance premium for the above-mentioned policies will be qualified under this section subject to the limits given below.

ParticularsMaximum deduction for Medical Insurance Premium
Parents age is below 60 yearsRs. 25,000
Either of the parents age is 60 years or aboveRs. 50,000

B. Preventive Health Check-up expenditure

Any expenses incurred for a periodical check-up conducted to diagnose the pre-existing diseases of an individual (if any) is also eligible under Sec 80D.

Expenditure paid for the benefit of Maximum deduction for Preventive Health Check-up
Self & Family*Rs. 5,000
ParentsRs. 5,000
* Family includes Spouse and Dependent Children

C. Medical Expenditure

Any expenditure incurred on the health of Senior citizens (i.e. either it can be for either Self, Spouse, Dependent children, or for parents) who are not covered under any of the medical insurance policies will be qualified under this section subject to the limits given below.

Medical expenditure incurred forMaximum deduction for Medical Expenditure
Self & Family*Rs. 50,000
ParentsRs. 50,000
* Family includes Spouse and Dependent Children

So, any individual can claim a deduction for his/her family and can also claim a deduction for the medical premium or medical expenditure incurred towards parents.

Though separate limits are mentioned for each category of expenditure mentioned above, the total deduction allowed for any individual (for Family & Parents) under Sec 80D is Rs. 1,00,000 only (i.e. A + B + C)

HUF

The following expenses incurred for the benefit of any member of the HUF will be allowed as deduction subject to the limits given below.

ParticularsMaximum deduction for Medical Insurance PremiumMaximum deduction for Medical ExpenditureMaximum deduction under Sec 80D
Age of all the members of HUF is below 60 yearsRs. 25,000Not applicableRs. 25,000
Age of any member of HUF is 60 years or aboveRs. 50,000Rs. 50,000 (Deduction is available only for Senior Citizens. However to claim this deduction such Senior Citizen should not be covered under any medical insurance scheme)Rs. 50,000

Hence, the total maximum deduction for HUF under section 80D (i.e. deduction for Medical Insurance Premium + Medical Expenditure) is Rs. 50,000

Quick Recap of Sec 80D

Given below table gives you the complete insight about the maximum deduction that an Individual can claim for each category of expenditure & maximum deduction under Sec 80D:

ParticularsMedical Insurance Premium# (1)Preventive Health Check-up expenses## (2)Maximum Deduction for (1) & (2)Medical Expenditure### (3)Maximum Deduction under Sec 80D (1+2+3)
Self & Family* – Age is below 60 yearsRs. 25,000Rs. 5,000Rs. 25,000Not applicableRs. 25,000
Self & Family* and Parents – Age is below 60 yearsRs. 25,000 for Self & Family; Additional Rs. 25,000 for ParentsRs. 5,000 for Self & Family; Additional Rs. 5,000 for ParentsRs. 25,000 for Self & Family; Additional Rs. 25,000 for ParentsNot applicableRs. 50,000 (Rs. 25,000 for Self & Family; Additional Rs. 25,000 for Parents)
Self & Family* – Age is below 60 years and Parents – Age is 60 years or aboveRs. 25,000 for Self & Family; Additional Rs. 50,000 for ParentsRs. 5,000 for Self & Family; Additional Rs. 5,000 for ParentsRs. 25,000 for Self & Family; Additional Rs. 50,000 for ParentsDeduction is available only for Senior Citizens. In this case, Parents are eligible to claim deduction for medical expenditure. However, this deduction is available only if Parents are NOT covered under any medical insurance scheme and maximum deduction that can be claimed is Rs. 50,000. Hence, an individual can either pay medical insurance premium or incur medical expenditure for their Parents to claim maximum deduction of Rs. 50,000Rs. 75,000 (Rs. 25,000 for Self & Family; Additional Rs. 50,000 for Parents)
[It can be either for medical insurance premium or for medical expenditure]
Self & Family* and Parents – Age is 60 years or aboveRs. 50,000 for Self & Family; Additional Rs. 50,000 for ParentsRs. 5,000 for Self & Family; Additional Rs. 5,000 for ParentsRs. 50,000 for Self & Family; Additional Rs. 50,000 for ParentsDeduction is available only for Senior Citizens. But, this deduction is available only if such Senior Citizens are NOT covered under any medical insurance scheme. Maximum deduction can be claimed is Rs. 50,000 for Self & Family and additional Rs. 50,000 for Parents. Hence, an individual can either pay medical insurance premium or incur medical expenditure to claim a maximum deduction of Rs. 1,00,000Rs. 1,00,000 (Rs. 50,000 for Self & Family; Additional Rs. 50,000 for Parents)
[It can be either for medical insurance premium or for medical expenditure]
* Family includes Spouse & Dependent Children
# Payment mode should be other than Cash
## Payment can be made in ANY mode INCLUDING Cash
### Payment mode should be other than Cash

Practical Understanding with Examples

Let’s understand better with the following examples:

Example1:

Mr. Naveen (Age 42 yrs) has paid Rs. 13,500 on 6.3.2020 for the medical insurance policy for Self & Family (i.e. Spouse & Children) and also paid Rs. 45,000 on 12.9.2019 for his parents (Father age is 68 yrs & Mother age is 59 yrs). What is a deduction allowed for Mr. Naveen under Sec 80D for FY 2019-20 (i.e. AY 2020-21)?

Ans: As per the provisions of Sec 80D, any Individual can claim a maximum deduction of Rs. 25,000 for medical insurance premium paid for Self & family (i.e. Spouse and Dependent Children) and additional deduction up to Rs. 25,000 for his/her parents, if all individuals age is below 60 years.

If any of the individual’s age either in his/her family (Self, Spouse & Children) or either of the parents age is 60 years or more, then the maximum deduction is Rs. 50,000 in each case.

In the above example, Mr. Naveen contributed both for Self & Family and for his parents also. Hence, he is eligible to claim the deduction for both under Sec 80D.

How much is the deduction?

ParticularsActual expenses incurredAmount of deductionReason
Towards premium paid for Self, Spouse & ChildrenRs. 13,500Rs. 13,500As all individuals age is below 60 years, the maximum deduction allowed is Rs. 25,000 (i.e. Rs. 25,000 or amount paid whichever is less). Hence, in this case Mr. Naveen can claim only Rs. 13,500 as a deduction.
Towards premium paid for ParentsRs. 45,000Rs. 45,000As one of the parent’s age is above 60 years (i.e. 68 years), the maximum deduction allowed is Rs. 50,000 (i.e. Rs. 50,000 or amount paid whichever is less). Hence, in this case Mr. Naveen can claim an additional deduction of Rs. 45,000 towards the premium paid for parents.
Total deduction under Sec 80DRs. 58,500As Mr. Naveen contributed both for his family and parents towards the medical insurance premium in FY 2019-20, he is eligible to claim a deduction of Rs. 58,500 under Sec 80D.

Example2

Mrs. Ritu, aged 35 yrs has paid Rs. 32,000 on 1.2.2020 for the medical insurance policy for Self & Family (i.e. Spouse & Children) and also incurred Rs. 75,000 on 5.7.2019 towards medical treatment for his father aged 62 yrs, who is not covered under any mediclaim policy. What is a deduction allowed for Mrs. Ritu under Sec 80D for FY 2019-20 (i.e. AY 2020-21)?

Ans: In the above example, Mrs. Ritu contributed both for herself (including her husband & children) towards medical insurance premium and incurred medical expenditure towards the treatment of her father also. Hence, she is eligible to claim the deduction for both the expenses under Sec 80D.

Let’s understand how much she can claim as a deduction for the medical insurance premium and medical expenditure.

ParticularsActual expenses incurredAmount of deductionReason
Towards premium paid for Self, Spouse & ChildrenRs. 32,000Rs. 25,000As all individuals age is below 60 years, the maximum deduction allowed is Rs. 25,000 (i.e. Rs. 25,000 or amount paid whichever is less). Hence, in this example only Rs. 25,000 can be claimed as a deduction. Though she paid Rs. 32,000 as mediclaim premium only Rs. 25,000 is allowed.
Towards medical expenditure incurred for fatherRs. 75,000Rs. 50,000As the medical expenditure is incurred for father whose age is 62 years, the maximum deduction allowed is Rs. 50,000 (i.e. Rs. 50,000 or amount paid whichever is less). Hence, in this example Rs. 50,000 is allowed as a deduction
Total deduction under Sec 80DRs. 75,000As Mrs. Ritu contributed for her family towards the medical insurance premium and incurred medical expenses towards her father in FY 2019-20, she is eligible to claim a deduction of Rs. 75,000 under Sec 80D

Frequently Asked Questions (FAQ)

  1. 1. Can I pay the mediclaim insurance premium in cash?
  2. Ans: No. The deduction is allowed only if you pay the premium in any mode other than cash. However, expenses towards Preventive health check-up can be paid in cash up to Rs. 5,000.
  • 2. What are the modes through which I can pay the medical insurance premium or medical expenditure?
  • Ans: There are many modes such as net banking, cheque, debit card, credit card, UPI, and mobile wallet payments. You can choose any of these options other than CASH to claim the deduction.
  • 3. What is a Single premium policy? How much deduction I can claim for Single premium policy?
  • Ans: It is a kind of policy wherein you pay the lumpsum premium for the entire tenure of the policy. For which, deduction is allowed on proportionate basis (i.e. total premium / Tenure of the policy) across the tenure.
  • 4. Whether GST paid on the premium can be claimed as a deduction?
  • Ans: Yes. You can claim deduction for GST too.
  • 5. Medical treatment expenses incurred outside India are allowed?
  • Ans: Yes. As there is nothing specified in the act, hence the same is allowed.
  • 6. Can i claim a deduction for the medical insurance premium or medical expenditure incurred for my parents in addition to my own contribution to the medical insurance premium?
  • Ans: Certainly yes. You can claim for yourself and as well as for parents also.

Though the article is lengthy, I hope you all enjoyed it. Pls provide comments/suggestions to improvise the content.

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Rahul

If an individual has taken the insurance for his senior citizen parents and suppose parents were hospitalized and insurance company has NOT settled the full amount claimed by hospital and that individual has paid the remaining amount digitally so in such case can an individual get the tax benefit under section 80 D if he is not crossing the limit of 50k?

Last edited 1 year ago by Rahul
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