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14. Substitution of new section for section 80D. |
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—For section 80D of the Income-tax Act, the following section shall be substituted with effect from the 1st day of April, 2009,—
‘80D. Deduction in respect of health insurance premia.—(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).’.
Clause 14 seeks to substitute section 80D of the Income-tax Act, which relates to deduction in respect of medical insurance premia.
The said section provides for deduction of up to fifteen thousand rupees to an assessee, being an individual or a Hindu undivided family, who makes payment of the specified sum by any mode, other than cash, to effect or keep in force an insurance on,—
(a) the health of the assessee or on the health of the wife or husband, dependant parents or dependant children of the assessee where the assessee is an individual;
(b) the health of any member of the family where the assessee is a Hindu undivided family.
The said section also provides that in case any of the insured persons is a senior citizen, the deduction would be available up to twenty thousand rupees.
With a view to encourage individual assessees to supplement their parents’ efforts to get themselves insured, it is proposed to substitute the said section so as to provide for an additional deduction of up to fifteen thousand rupees to an individual assessee who makes payment of the specified sum, by any mode, other than cash, to effect or keep in force an insurance on the health of his parent or parents. The existing condition of the parents being dependant on the assessee is proposed to be dispensed with. This deduction shall be in addition to the existing deduction of up to fifteen thousand rupees available to the individual assessee on an insurance for himself, his spouse and dependant children.
It is also proposed that if either of the individual assessee’s parents is a senior citizen, and who has been insured, the deduction available would be up to twenty thousand rupees.
This amendment will take effect from 1st April, 2009 and will accordingly apply in relation to the assessment year 2009-10 and subsequent assessment years.
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