Get a preventive health check-up done and save on tax too!
Section 80D of the Income-Tax Act, talks about the deduction in respect of premium pad towards a health insurance policy for self, spouse, dependent children and parent.
The maximum limit of deduction prescribed in the section 80D is Rs.15,000 for insurance premium paid for self, spouse and dependent children.
Another, Rs.15,000 is for insurance premium paid for the health insurance of parents and in case parents are above the age of 60 Years i.e. senior citizens than the limit of Rs.15,000 is increased by Rs.5,000 to Rs.20,000.
Remember there is no necessity of parents to be dependent and in case parent(s) are non-resident the clause of senior citizen does not apply and even they are of the age above 60 years, nominal deduction of Rs.15,000 is allowed.
Preventive Health-Checkup under section 80D
Prevention is better than cure. Especially, if you get a tax break for it.
With a view to above quotation, Finance Act, 2012 had amended section 80D by adding the deduction of any payment made towards preventive health check-up scheme or Central Government Health Scheme (CGHS) by an assessee on for self, spouse, dependent children and parent(s), maximum in aggregate of Rs.5,000.
This amendment does not enhance the overall limit of deduction under section 80D, the limit of Rs.15,000 is inclusive of Rs.5,000. This the deduction on account of expenditure on preventive health check-up (for self, spouse, dependent children and parents) shall not exceed in the aggregate of Rs.5,000.
For example, If sanyam spent Rs. 12,000 for self health insurance and also paid Rs.4,000 towards Central Government Health Check-up. In addition, he has also incurred Rs.17,000 on his father’s (age 65 years) insurance policy with another payment Rs.24,00 towards his health check-up. Now, the total deduction would be.
|For Sanyam’s Father
Although deduction limit for Senior Citizen is Rs.20,000 but the limit of preventive health check-up is maximum of Rs.5,000 in aggregation. So even if the limit is not exhausted in sanyam’s father case but payment towards health check-up would not exceed Rs.2,000.
Mode of Payment:
Further, for the purpose of deduction under section 80D, payment can be made:
(i) for health check-up, by cash also with all the other available mode i.e. demand draft, credit card, debit card, cheque etc.
(ii) in all other cases, any mode except cash.
Documents to Claim deduction for payment towards preventive health check-up under section 80D:
Salaried individuals can submit photocopy of the bill to their employer at the time of investment declaration. Non-salaried individuals can keep the original receipt with them in case the ITO demands the same in the future.
Although there is no particular format has been prescribed but an AO can demand for the supporting or proofs, in that case followings shall be produced:
- Since cash payment is allowed, so cash receipt would be considered an authentic proof.
- Reports of Health Check-up of Health Center.
- Bills for which payment is made.
Above deduction is available with effect from 1st April, 2013 and accordingly, apply in relation to the assessment year 2013-14 and subsequent assessment years.