The best way to prevent diseases and complications is to have regular Preventive Health Checkups. Therefore, the purpose of a Preventive Health Checkup is to identify and minimize such risks as early as possible. By detecting potential health issues early, preventive checkups can reduce the financial burden of healthcare by reducing the cost of healthcare ultimately.
Health is one of the most overlooked areas by Indians. People are ready to invest in properties, cars and entertainment, but not on health.
Any taxpayer can claim a deduction up to ₹5,000 per assessment year on account of preventive health check-ups of self, spouse, children and parents. However, this deduction forms a part of the deductions allowed under Section 80D.
Tax Deduction u/s 80D of Preventive Health Check Up
As per the current norms, an assessee can claim a deduction up to ₹5,000 for a preventive health check-ups. It should be noted that if the amount spent by the assessee for preventive health check-ups is less than ₹5,000 then the actual spend amount will qualify for the deduction. On the other hand, if the amount spent by the assessee for preventive health check-ups is more than 5,000 then only ₹5,000 would be claimed as a deduction. Health insurance policies require policyholders to pay premiums through organised banking channels in order to claim tax deductions, but you can still claim the deduction of preventive health check up even if you paid the bills in cash.
Who all are included?
- Taxpayer’s spouse
- Taxpayer’s parents
- Taxpayer’s children
- Taxpayer’s dependents
Who are all NOT included?
- Taxpayer’s in-laws
- Taxpayer’s children who are financially independent
- Taxpayer’s siblings
- Taxpayer’s uncle, aunt, cousin and other distant relative
The payment can be made in any mode. You are also eligible for deduction under section 80D of preventive health checkups if payment is made in cash. But the health insurance premium will only be eligible for deduction under section 80D if paid other than in cash.
Computation of Deduction under preventive health check-up
Computation of deduction under preventive health check-ups is included in the accumulative deduction offered under Section 80D, that is, ₹25,000. Let’s take 2 scenarios to clear any doubts.
Suppose Mr Vikash has spent ₹5000 on his health insurance, ₹5000 on his spouse’s health insurance and ₹10,000 on his father’s health insurance. Along with these expenses, he has also paid for his father’s preventive health check-up which amounts to ₹4,000.
In this case, the total available deduction available to Mr. Vikash under Section 80D is ₹(5,000 + 5,000 + 10,000 + 4,000) = ₹24,000.
Suppose Mr Varun has spent ₹10,000 on his health insurance, ₹10,000 on his spouse’s health insurance and ₹10,000 on his father’s health insurance. Along with these expenses, he has also paid for his father’s preventive health check-up which amounts to ₹8,000.
In this case, the total available deduction available to Mr Varun would be ₹35,000 only. This is because total amount spend is ₹(10,000 + 10,000 + 10,000 + 8000) = ₹38,000.
As you can get a tax deduction for a preventive health checkup to Rs.5000 only.
Suppose Mr Vinay has spent ₹10,000 on his health insurance, ₹10,000 on his spouse’s health insurance and ₹10,000 on his father-in-law’s health insurance. Along with these expenses, he has also paid for his father-in-law’s preventive health check-up which amounts to ₹6,000.
In this case, the total deduction available to Mr Vinay would be ₹20,000. Contribution to health insurance for self and spouse would qualify (₹10,000 each), but the contribution made for father-in-law will not qualify. Moreover, the amount for preventive health check-ups will also not qualify as it has been incurred on account of his father-in-law. Therefore, even if Mr. Vinay has spent ₹36,000 [10,000 + 10,000 + 10,000 + 6000], only ₹20,000 qualifies for deduction under Section 80D.
Health insurance premium & preventive health checkup is allowed for deduction under section 80D for Father in law.