Deduction for Medical Insurance under Section 80D

• If the medical premium is made for self, spouse or dependent children, then the maximum deduction allowed is Rs. 25,000. Maximum deduction allowed in case of a senior citizen (more than 60 years but less than 80) is Rs. 30,000.
• An additional deduction for insurance of parents of both mother and father is available to the extent of Rs. 25,000, if they both are less than 60 years old. In case, the parents are above 60 years then the maximum deduction allowed is Rs. 30,000.
• For super senior citizens (more than 80 years old) maximum deduction allowed is Rs. 30,000 under section 80D.
• A deduction of Rs. 5,000 can be claimed every year on the expenses related to health check-ups. This includes the medical check-up expenses of all members in a family including spouse, children, and parents.
• Deduction under section 80D can be claimed by members of the Hindu Undivided Family (HUF). The maximum deduction allowed under this section is Rs. 25,000 and in case any member of the HUF covered by the medical policy is a senior citizen then the deduction allowed under section 80D is increased to Rs. 30,000.

Categories	Exemption limit	Health check-up exemption	Total deduction
Self and Family	Rs. 25,000	Rs. 5,000	Rs. 30,000
Self, Family, and Parents	Rs. (25,000 + 25,000) = Rs. 50,000.	Rs. 5,000	Rs. 55,000
Self, Family and	Rs. (25,000 + 30,000)	Rs. 5,000	Rs. 60,000
Senior Citizen Parents.	Rs. = Rs. 55,000
Self (Senior Citizen), Family and Senior Citizen Parents.	Rs. (30,000 + 30,000) = Rs. 60,000	Rs. 5,000	Rs. 65,000

Example: During a financial year, an individual assessee pays medical premium insurance from his taxable income as under:

• Rs.13,000 as insurance policy premium on his own health.
• Rs. 32,000 as insurance policy premium on the health of his parents.

As per the above-mentioned example, the maximum deduction allowed will be Rs. 38,000 (13,000 + 25,000) if neither of the parent is a senior citizen.

In case, any of the parents is a senior citizen, then the deduction allowed will be Rs. 43, 000 (13,000 + 30,000). The dependency of the parents is not put into consideration to decide for availing the benefits under the new provisions.

Further, if as per the above example, Rs. 18,000 is paid by non-cash mode by the assessee and the remaining Rs. 14,000 is paid by the father who is a senior citizen then out of their respective taxable income the son will get a deduction of Rs. 18,000 in addition to the deduction of Rs. 18,000 for medical insurance on self and family. And father will get a deduction of Rs. 14,000.

Difference between section 80D and section 80C

Basis	Section 80D	Section 80C
Introduction	Section 80D was introduced under Income Tax Act, 1961.	Section 80C was introduced under Finance Act, 2005
Maximum Deduction	Maximum deduction allowed under section 80D is Rs. 60,000	Maximum deduction allowed under Section 80C is Rs. 1,50,000
Instruments used	An instrument that gives section 80D benefits is Mediclaim Policy.	Instruments that gives Section 80C benefits are Life Insurance Premium, Employees Provident Fund (EPF), Deferred Annuity/ Pension Plan etc.

Under section 80C, deduction can be claimed on various sources like Employees Provident Fund (EPF), Life Insurance premium etc. However, under section 80D deduction can be claimed only for medical Insurance and health checkup.