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April 28, 2020

Know how much medical Insurance deduction you can claim for yourself and parents from April 2020

by facelesscompliance in Income Tax

Know how much mediclaim or Health Insurance deduction you can claim for yourself and parents from April 2020

Deductions are the eligible expenses notified by the Income tax act which the assessee can claim against the income in order to reduce his total income and ultimately save his taxes. Investing in various schemes of notified by government will help you ultimately reduce the tax. There are various deduction from Section 80C to 80U available to Individuals and HUF. Section 80D is applicable to individuals and HUF for all the medical expenses he does. An assessee can get deduction under section 80D as follows:

  1. In case of individual a deduction of Rs. 25,000 will be applicable if medical insurance is taken for self, spouse and dependent children. The assessee will get an additional deduction of Rs. 25,000 for the mediclaim of parents if they are less than 60 years and if they are more than 60 years of age then assessee is eligible for maximum of Rs. 50,000 deduction on parents mediclaim premium.
  2. In case both the  assessee and the parents are more than 60 years then both will get a deduxtion of Rs. 50,000 each i.e. the assessee will get a total deduction of Rs. 1,00,000 under section 80D.
  3. In case of HUF the assessee will get a maximum dedution of Rs. 25,000.
  4. In case of Non resident individual the assessee will get a maximum dedution of Rs. 25,000.

The above provision can be summarised as below:

Covered Individuals
(Amt in Rs)
Maxiumum deduction for self, family and childrenMaxiumum deduction for parentsTotal Maximum deduction under 80D for Individual
Self, family and parents below 60 years25,00025,00050,000
Self and family but parents above the age of 6025,00050,00075,000
Both the individual and parents are above 60 years of age50,00050,0001,00,000
Members of HUF25,00025,00025,000
Non resident25,00025,00025,000

Important Points to be Remember while claiming deduction in Section 80D of Income Tax

  1. The maximum deduction under 80D shall include expense paid on preventive health check up for a maximum of Rs. 5,000.
  2. Senior citizen” means an individual resident in India who is of the age of sixty years or more at any time during the relevant previous year.
  3. Family  means the spouse and dependant children of the assessee
  4. Non resident will get maximum deduction of Rs. 25,000 even if he or his parents are of more than 60 years of age.
  5. Payment should be made in any mode other than cash
  6. Contribution towards health insurance plan has to made to a scheme as specified by the Central Govt./ approved by IRDA
  7. Medical premium paid towards brother, sister or any other relative cannot be considered as deduction under 80D
  8. Premium paid on medical insurance of independent children is not eligible for deduction
  9. For FY 2019-20 you can pay the medical premium till 30 June 2020 and still claim deduction for FY 2019-20 Income Tax Returns, Individuals have option to select which Financial Year they want to claim if the premium is paid in between 1 April 2020 to 30 June 2020, FY 2019-20 or FY 2020-21

What if the assessee has paid medical premium for more than 1 year?

As per amendment made by Finance Act 2018, in case assessee has paid mediclaim for more than 1 year then the deduction allowable under this section for each relevant previous year would be equally divided by number of years for which the medical premium is paid

For Instance Example 1

Mr. X has paid mediclaim premium of Rs. 40,000 which is covered for the previous year from 2019-20 to 2022-23 (i.e. for 4 years)

In this case Mr. X will get deduction of Rs. 10,000 per year (40,000 X 1/4 years) under 80D till PY 2022-23.

For Instance Example 2

Mr. A has paid a health insurance premium of Rs. 20,000 for the insurance of self, his wife and children and paid health insurance premium of Rs. 25,000 for the insurance of his senior citizen parents and has incurred expense on preventive health check up of Rs. 2,000 of self and Rs. 5,000 for preventive health check up of his parents.

In this case Mr. A can claim a maximum deduction of Rs. 50,000 under 80D of the Income Tax act. Deduction Rs. 25,000 for health insurance of senior citizen parents, Rs. 20,000 for health insurance of self, spouse and children and Maximum Rs. 5,000 deduction for preventive health check up. The above can be summarised as follows:

ParticularsAmount of deduction
Mediclaim of Self, spouse and childrenRs. 20,000
Meclaim of Senior citizen parentsRs. 25,000
Preventive health checkup of self and parentsRs. 5,000
Total Deduction under section 80DRs. 50,000