Deduction Limit: Section 80D of The Income Tax Act for AY 2021-22

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, the provision of which is covered under section 80D of the Income Tax Act. Under this article, we will discuss the limit of section 80D of Income Tax Act for AY 2021-22.

Section 80D of Income Tax Act for AY 2021-22

For AY 2021-22, this section contains the provision regarding the deduction on payment of medical insurance premium, central government health scheme, and payment on account of preventive health checkup from the gross total income of the assessee. It allows a deduction of payment for the taxpayer himself, his family member, and/or his parents

Deduction limit under section 80D for AY 2021-22

Section 80D of Income Tax Act for AY 2021-22- Before knowing the deduction limit, it is important to note that, this section allowed a deduction to Individual and HUF assessee only, the same is given here under this post.

Section 80D deduction limit for AY 21-22: Self and Family

Below 60 years of age- Maximum deduction limit of Rs. 25,000 per year on payment made*.

Senior Citizen- Maximum deduction of Rs. 50,000 per year on payment made* if you are a senior citizen.

(*) The word “payment made” refers to payment for medical insurance premium, central government health scheme, and payment on account of preventive health checkups

Also Read- What is the due date of the Income Tax Return for AY 2021-22 or FY 2020-21?

80D deduction limit for AY 2021-22: Parents Payment

Parents are below 60 years of age- Maximum deduction of Rs. 25,000 per year on payment made**.

Parents are senior citizens- Maximum deduction of Rs. 50,000 per year on payment made** for the senior citizen parents.

(**) The word “payment made” refers to payment for medical insurance premium, and payment on account of preventive health checkups

Note- The above limits are separate limits that can be combined for deduction purposes (See Chart Below).

Section 80D deduction limit for AY 2021-22 in case of HUF

The following amount of payment will be available for deduction u/s 80D-

The medical insurance amount paid for the benefits of any member of HUF to the extent of Rs. 25,000 and

Any amount paid for the medical expenditure*** of any member of HUF to the extent of Rs. 50,000.

(***) For the purpose of claiming medical expenditure deduction, it is provided that the amount of it should be paid for the benefit of senior citizen members and there should be no medical insurance pay for the benefit of that member.

It is also provided that total deduction can not be exceeded by Rs. 50,000/-

Also Read- What is the Interest and Penalty for late filing of ITR for AY 2021-22

Health Checkup Covered u/s 80D

If during the year assessee for himself and his family and/or for his parents, paid any amount for a 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.

Section 80D Medical Expenditure Limit for AY 2021-22

Medical expenditure under section 80D of the Income Tax Act is an allowable expense provided that, the assessee should be a senior citizen person and no amount should be paid in respect of his medical insurance. The limit of medical expenditures is as follows.

For himself or his family member- The whole amount paid on account of medical expenditure incurred on the health of the assessee or his family member should not exceed Rs. 50,000.

For Parents- The whole amount paid on account of any medical expenditure incurred on the health of any parent should not exceed Rs. 50,000.

Also Read- Section 80DDB of Income Tax Act for AY 2021-22

Section 80D of Income Tax Act for AY 2021-22- Deduction limit Chart

The following chart will clear all your doubts about the medical expenditure deduction limit under Section 80D of Income Tax Act for AY 2021-22.

Covered assesseeExemption Limit****Health Check-upTotal Eligible Deduction
Self and FamilyRs. 25,000Rs. 5,000Rs. 25,000
Self and Family + ParentsRs. 50,000 (25000+25000)Rs. 5,000Rs. 50,000
Self and Family + Senior Citizen ParentsRs. 75,000 (25000+50000)Rs. 5,000Rs. 75,000
Self (Senior Citizen) and Family + Senior Citizen ParentsRs. 1,00,000 (50000+50000)Rs. 5,000Rs. 1,00,000
Section 80D of Income Tax Act for AY 2021-22

(****) Note 1- It covered the payment of medical insurance premiums and central government health schemes.

Also Read- Section 80DD of Income Tax Act for AY 2021-22

Note 2- For claiming deduction under section 80D of Income Tax Act for AY 2021-22, the payment of medical insurance should be made through online banking, a cheque, draft, debit or credit card, etc i.e. other than cash payment.

But for preventive health check-ups, the payment can be made through any mode including cash.

Important points for section 80D

The following points are important to keep in mind while taking deduction under section 80D of Income Tax Act for AY 2021-22

  • For the purpose of claiming medical expenditure and medical premium, the total deduction should not be exceeded Rs. 50,000.
  • Contribution towards health insurance plan has to be made to a scheme as specified by the Central Government approved by IRDA.
  • Premium paid towards a brother, sister, grandparents, aunts, uncle or any other relatives cannot be claimed as a deduction for taking tax benefits.
  • Premium paid on behalf of working children can not be taken for the tax benefit.
  • The deduction has to be claimed without showing the GST and other taxes.
  • Group Health Insurance Premium provided by the company is not eligible for deduction.

Must Read- Standard Deduction for AY 2021-22 for Salaried Individuals.

Some FAQs for Section 80D

  1. What does family mean for the purpose of section 80D?

    For the purpose of section 80d, family means the spouse and dependent children of the assessee.

  2. What type of payment included u/s 80d of the Income Tax Act.

    Section 80d contains the provision regarding the deduction on payment of medical insurance premium, central government health scheme, and payment on account of preventive health checkups.

  3. Who is Senior Citizen?

    Senior Citizen means an individual resident in India who is the age of sixty years or more at any time during the relevant previous year.

  4. Is proof required for 80D?

    There is no requirement for submitting proof of payment to the Income Tax Department but safe aside you can keep a copy and other details of it for future reference.

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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)

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