74[Deduction in respect of medical insurance premia.

80D. (1) In computing the total income of an assessee, there shall be deducted at the following rates, such sum as is specified in sub-section (2) and 75[paid by him by any mode of payment other than cash] in the previous year out of his income chargeable to tax, namely :—

           (i)  in a case where such sum does not exceed in the aggregate 76[fifteen] thousand rupees, the whole of such sum; and

          (ii)  in any other case, 76[fifteen] thousand rupees :

77[Provided that where the sum specified in sub-section (2) is paid to effect or to keep in force an insurance on the health of the assessee, or his wife or her husband or dependant parents or any member of the family in case the assessee is a Hindu undivided family, and who is a senior citizen, the provisions of this section shall have effect as if for the words “78[fifteen] thousand rupees”, the words “79[twenty] thousand rupees” had been substituted.]

(2) The sum referred to in sub-section (1) shall be the following, namely :—

          (a)  where the assessee is an individual, any sum paid to effect or to keep in force an insurance on the health of the assessee or on the health of the wife or husband, dependent parents or dependent children of the assessee;

          (b)  where the assessee is a Hindu undivided family, any sum paid to effect or to keep in force an insurance on the health of any member of the family :

          (c)  80[* * *]

81[Provided that such insurance shall be in accordance with a scheme82 framed in this behalf by—

          (a)  the General Insurance Corporation of India formed under section 9 of the General Insurance Business (Nationalisation) Act, 1972 (57 of 1972) and approved by the Central Government in this behalf; or

          (b)  any other insurer and approved by the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999).]]

83[Explanation.—For the purpose of this section, “senior citizen” shall have the meaning assigned to it in the Explanation to section 80DDB.]

The following section 80D shall be substituted for section 80D by the Finance Act, 2008, w.e.f. 1-4-2009 :

Deduction in respect of health insurance premia.

80D.    (1) In computing the total income of an assessee, being an individual or a Hindu undivided family, there shall be deducted such sum, as specified in sub-section (2) or sub-section (3), payment of which is made by any mode, other than cash, in the previous year out of his income chargeable to tax.

(2) Where the assessee is an individual, the sum referred to in sub-section (1) shall be the aggregate of the following, namely:—

          (a)  the whole of the amount paid to effect or to keep in force an insurance on the health of the assessee or his family as does not exceed in the aggregate fifteen thousand rupees; and

          (b)  the whole of the amount paid to effect or to keep in force an insurance on the health of the parent or parents of the assessee as does not exceed in the aggregate fifteen thousand rupees.

Explanation.—For the purposes of clause (a), “family” means the spouse and dependant children of the assessee.

(3) Where the assessee is a Hindu undivided family, the sum referred to in sub-section (1) shall be the whole of the amount paid to effect or to keep in force an insurance on the health of any member of that Hindu undivided family as does not exceed in the aggregate fifteen thousand rupees.

(4) Where the sum specified in clause (a) or clause (b) of sub-section (2) or in sub-section (3) is paid to effect or keep in force an insurance on the health of any person specified therein, and who is a senior citizen, the provisions of this section shall have effect as if for the words “fifteen thousand rupees”, the words “twenty thousand rupees” had been substituted.

Explanation.—For the purposes of this sub-section, “senior citizen” means an individual resident in India who is of the age of sixty-five years or more at any time during the relevant previous year.

(5) The insurance referred to in this section shall be in accordance with a scheme made in this behalf by—

          (a)  the General Insurance Corporation of India formed under section 9 of the General Insurance Business (Nationalisation) Act, 1972 (57 of 1972) and approved by the Central Government in this behalf; or

          (b)  any other insurer and approved by the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999).