Section 80D

Eligible Assesses

Individuals and Hindu Un-divided Family (HUF) only

Scope

  • Health Insurance Premium paid under a scheme framed by any other insurer and approved by the Insurance Regulatory & Development Authority (IRDA).

Mode of Payment

The premium may be paid by any mode of payment other than cash.

Deduction under Section 80 D of the Income Tax Act, 1961

  • For senior citizens i.e an individual resident who is of the age of 65 years or more at any time during the relevant previous year: The amount of heath insurance premium paid or Rs. 20,000, whichever is less.
  • For non-senior citizens: The amount of health insurance premium paid or Rs. 15,000, whichever is less.

Who can be covered

  • For an individual: Premium paid for insuring the health of the individual, his or her spouse, parents and children.
  • For a HUF: Premium paid for insuring the health of any member of the family.

Let us now understand the computation of the deduction with the help of a simple example # :
An individual assesses pays (through any mode other than cash) during the previous year health insurance premium as under:

  1. Rs. 12,000 to keep in force an insurance policy on his health and on the health of his wife and children
  2. Rs. 17,000 to keep in force an insurance policy on the health of his parents.

Under the proposed new provisions, he will be allowed a deduction of Rs. 27,000 (Rs. 12,000+ Rs. 15,000) if neither of his parents is a senior citizen. However, if any of his parents is a senior citizen, he will be allowed a deduction of Rs. 29,000 (Rs. 12,000 + Rs. 17,000).

Source: CIRCULAR NO.9 /2008 [F. NO. 275/ 192/ 2008-IT(B)]

# Deduction under Section 80D would be available as per the provisions of the Income tax Act, 1961.
Kindly consult your tax advisor for the exact computation of the deduction and consequent tax liability.
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