Income Tax - Deduction u/s 80D for Health Insurance Premium

Payment of health insurance premium should not be made in cash. However, payment on account of preventive health check-up can be made by any mode (including cash). Preventive health check-ups also qualify for a deduction u/s section 80 D but the deduction is not available over and above the maximum limit of Rs. 15,000 for assessment year 2015-16 and 25,000 for assessment year 2016-17 respectively. The above mentioned deduction limit is applicable for a resident individual, not being a senior citizen. This limit includes the premium paid towards the individual himself, his spouse and children.  

 For a senior citizen, the maximum deduction available in respect of the health insurance premiums paid is Rs. 20,000 for assessment year 2015-16 and 30,000 for assessment year 2016-17. Senior citizen for the aforesaid purpose is a resident individual and whose age at anytime during the relevant previous year should be at least 60 years.

If an individual pays the health insurance towards his parents, who are senior citizens, then he can claim a deduction of Rs. 35,000 i.e. Rs.15,000 for himself and Rs. 20,000 with respect to his parents for assessment year 2015-16. The same limit is increased to Rs. 55,000 for assessment year 2016-17 i.e. Rs. 25,000 and Rs. 30,000.

It’s important to note that from assessment year 2016-17 onwards, for uninsured super senior citizens (more than 80 years old) medical expenditure incurred up to Rs 30,000 shall be allowed as a deduction under section 80D.