Question

Mahesh, his wife and two sons are independently-employed persons. Mahesh and his wife are not senior citizens. Mahesh paid mediclaim insurance of ₹ 8,000 for himself, ₹ 10,000 for his wife and ₹ 9,000 each for both of his sons. He also pays ₹ 11,000 for each of his parents, who are senior citizens. Calculate the amount of deduction allowed under Section 80D.

Hint:

Cap the family premium at ₹ 25,000 and add the parents' premium of ₹ 22,000, which is within the ₹ 50,000 senior citizen limit.

Answer 1

Step 1: Rule of Section 80D:
Section 80D allows a deduction for a health insurance (mediclaim) premium paid by an individual or HUF. The premium must be paid by any mode other than cash.
For self, spouse and dependent children, the limit is ₹ 25,000 if none is a senior citizen.
For parents, the limit is another ₹ 25,000, and it rises to ₹ 50,000 if the parents are senior citizens.

Step 2: Premium for Mahesh, wife and sons:
Mahesh and his wife are not senior citizens, and the sons are children. So the ₹ 25,000 limit applies to this group.
\[ 8{,}000 + 10{,}000 + 9{,}000 + 9{,}000 = 36{,}000 \]
The premium paid is ₹ 36,000, which is more than ₹ 25,000. So the deduction for this group is capped at ₹ 25,000.

Step 3: Premium for parents:
Both parents are senior citizens, so the limit is ₹ 50,000.
\[ 11{,}000 + 11{,}000 = 22{,}000 \]
The premium paid is ₹ 22,000, which is less than ₹ 50,000. So the full ₹ 22,000 is allowed.

Step 4: Total deduction:
\[ 25{,}000 + 22{,}000 = 47{,}000 \]

Final Answer:
The deduction allowed under Section 80D is ₹ 47,000 (₹ 25,000 for the family and ₹ 22,000 for the parents).