Deduction in respect of Health Insurance - (New) Section 126 / (Old) Section 80D

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....¢ The payment shall be made for the purposes of deduction under section 126(1) by any mode,- • (a) including cash, in respect of any sum paid on account of preventive health check-up; or • (b) other than cash in all other cases not falling under clause (a). [ section 126(9) ] Deduction Available to an Individual for Health Insurance and Medical Expenditure [ Section 126(2) ] (a) (b) (c) (d) Deduction for Self and Family Deduction for Parents Deduction for Medical Expenditure on Self and Family Deduction for Medical Expenditure on Parents Eligible payments include: • Health insurance premium • Contribution to CGHS • Contribution to n....

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....ses (c) and (d) Medical expenditure deduction is allowed only when: • Medical expenditure is incurred on a senior citizen. AND • No health insurance premium has been paid for that senior citizen. [ Section 126(7) ] Threshold Limit for Deduction  [ Section 126(4) ] Insurance and medical expenditure cannot both be fully claimed. (a) Overall Ceiling for Self/Family [ Section 126(2)(a) and (c) ] • This subsection prevents double deduction. • Combined deduction cannot exceed for self/family = Insurance + Medical expenditure • Maximum = Rs.50,000 (b) Overall Ceiling for Parents [ Section 126(2)(b) and (d) ] • This subsec....

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....80D of the Income Tax Act, 1961 [ Upto 31.03.2026 ] Eligibility • Insurance premium paid for the health of the assessee or his family. The section grants tax deduction on medical insurance premiums and medical expenditure. • Individual / HUF are eligible • The section offers deductions over and above the exemptions derived from the more popularly known Section 80C. Amount of Deduction:     Deduction in the case of individual Deduction in the case of HUF   For whose benefit payment can be made Family Parents Any member • Medi-claim insurance premium Eligible Eligible Eligible Contribution to CGHS/notified scheme Eligibl....