How to Claim Tax Deduction Under Section 80D for Medical Expense

The amended Section 80D of the Income Tax Act allows deduction for medical expenditure incurred on senior citizens.

Over 58,322 income tax cases have been selected under the National e-Assessment Center (NeAC).

(Photo: The Quint)

Buying health insurance policies for ourselves or family members is one way to save tax. However, an individual who is supporting his/her parents can also save tax by buying health insurance for them.

The 2018 Budget amended Section 80D of the Income Tax Act allows deduction for medical expenditure incurred on senior citizens. This deduction can be claimed by the senior citizen himself/herself or by his/her children, if the latter are incurring medical expenditure for their senior citizen parents.

This amendment is a tax saving measure and allows to claim deductions against the high interest insurance premiums. The main condition to claim the deduction for medical expenditure incurred is that the senior citizen should not be covered under any health insurance policy.

Here is all you need to know to claim deductions under this amendment:

Eligibility for Deduction

There are two eligibility requirements:

The medical expenditure must be incurred on the family members and/or parents who are aged 60 years and above.

The amendment defines a family member as the person himself, spouse and dependent children.

The person for whom medical expenditure has been incurred should not be covered under any health insurance policy.

Who Can Claim the Deduction?

Deductions can be claimed by the person who has incurred the medical expenditure:

If you are a senior citizen and are not covered under any health insurance policy, you can claim the deduction yourself.

If you are supporting your parents who are above the age of 60 and have incurred medical expenditure during the financial year for them.

Mode of Payment Eligible for Deduction

According to the amendment, payment of premium on medical policy or medical expenditure will be available only if payment is done via any mode other than cash i.e., net-banking, cheque, debit card etc., or digital channels such as UPI, mobile wallets.

If the payment is made in cash, the individual who incurred the expense will not be able to claim deduction.

Maximum Deduction Allowed

The person who incurred the medical expense can claim maximum deduction of Rs 50,000 in a financial year for the expenses incurred.

Family Member		Parents
Nature of amount spent	Age below 60 years	Age above 60 years	Age below 60 years	Age above 60 years
Medical Insurance (Rs)	25,000	50,000	25,000	50,000
CGHS (Rs)	25,000	25,000	Not Available	Not Available
Health Check-up* (Rs)	5,000	5,000	5,000	5,000
Medical Expenditure** (Rs)	Not Available	50,000	Not Available	50,000
Maximum deduction U/S 80D (Rs)	25,000	50,000	25,000	50,000