Considering the rate at which medical costs are rising it is very important to have medical insurance. In spite of giving benefits in reducing medical costs, it also reduces some burden of tax over assessee. Under this article, we will discuss the limit of 80D Deduction for AY 2020-21 or FY 2019-20.
Limit of 80D Deduction for AY 2020-21
Section 80D of Income Tax Act- This section contains the provision regarding the deduction on payment of medical insurance premium and health checkup from the gross total income of the assessee. It allows deduction on payment of premiums of medical insurance policy for the taxpayer himself and/or a family member.
This section allowed a deduction to Individual and HUF assessee only. The limit of 80D deduction for AY 2020-21 are as follow-
80D deduction limit for Individual- Self and Family AY 2020-21
👉 Maximum deduction limit of Rs. 25,000 per year on health insurance premium paid for self and family.
80D deduction limit for Parents AY 2020-21
👉 Maximum deduction of Rs. 50,000 per year if you are a senior citizen.
Read Full Section Here- Section 80D of Income Tax Act
80D deduction limit for Senior Citizen AY 2020-21
For Self and Family- Maximum deduction of Rs. 50,000 per year if you are a senior citizen.
For Parents- Maximum deduction of Rs. 50,000 per year on premium payment for senior citizen parents.
Note- 80D Health Checkup,
If during the year assessee for himself and family and/or for his parents, paid any amount for health checkup then he will be eligible to get Rs. 5,000 as a deduction under section 80D of the Income Tax Act. This deduction is subject to the maximum permissible amount as prescribed above.
Also Read- Section 80D deduction limit for AY 2021-22
Section 80D Deduction list for Assessment Year 2020-21
The following chart will show you all the eligible deduction under this section for AY 2020-21
| Covered assessee | Exemption Limit | Health Check-up | Total Eligible Deduction |
|---|---|---|---|
| Self and Family | Rs. 25,000 | Rs. 5,000 | Rs. 25,000 |
| Self and Family + Parents | Rs. 50,000 (25000+25000) | Rs. 5,000 | Rs. 50,000 |
| Self and Family + Senior Citizen Parents | Rs. 75,000 (25000+50000) | Rs. 5,000 | Rs. 75,000 |
| Self (Senior Citizen) and Family + Senior Citizen Parents | Rs. 1,00,000 (50000+50000) | Rs. 5,000 | Rs. 1,00,000 |
Note- If you are paying a medical insurance premium or incurred health check-up expenses in cash then you will not be eligible to claim deduction under section 80D of the Income Tax Act.
The payment should be made through online banking, a cheque, draft, debit or credit card, etc.
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Disclaimer: The information contained in the above article are solely for informational purpose after exercising due care. However, it does not constitute professional advice or a formal recommendation. The author does not own any responsibility for any loss or damage caused to any person, directly or indirectly, for any action taken on the basis of the above article.
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Compiled by- CA Chirag Agarwal (Practicing Chartered Accountants)