51[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 paid by him by cheque 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 three thousand rupees, the whole of such sum; and

(ii) in any other case, three thousand rupees.

(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) where the assessee is an association of persons or a body of individuals consisting, in either case, only of husband and wife governed by the system of community of property in force in the Union territories of Dadra and Nagar Haveli and Goa, Daman and Diu, any sum paid to effect or to keep in force an insurance on the health of any member of such association or body or on the health of the dependent children of the members of such an association or body:

Provided that such insurance shall be in accordance with a scheme52 framed in this behalf by 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.]


51. Inserted by the Income-tax (Amendment) Act, 1986, w.e.f. 1-4-1987. Original section 80D dealing with deduction in respect of medical treatment, etc., of handicapped dependants was introduced by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1968 replacing old section 80B which was inserted by the Finance Act, 1965, w.e.f. 1-4-1965. Original section 80D, as amended by the Finance Act, 1981, w.e.f. 1-4-1982 and the Finance Act, 1968, w.e.f. 1-4-1969, stood as under before its omission by the Finance Act, 1984, w.e.f. 1-4-1985:

"80D. Deduction in respect of medical treatment, etc., of handicapped dependants.— (.1) Where an assessee who is resident in India, being an individual or Hindu undivided family, who has, during the previous year, incurred out of his or its income chargeable to income-tax, any expenditure for the medical treatment (including nursing) of a person who—

(a) is a relative of the individual or, as the case may be, is a member of the Hindu undivided family and is not dependent on any person other than such individual or Hindu undivided family for his support or maintenance, and

(b) is suffering from a physical or mental disability which is certified by a registered medical practitioner to have the effect of reducing considerably such person's capacity for normal work or engaging in a gainful employment (hereafter in this section referred to as handicapped dependant),

the assessee shall, in accordance with and subject to the provisions of this section, be allowed a deduction of the amount specified in sub-section (2) in the computation of his total income in respect of the previous year.

(2) The deduction under sub-section (1) shall be—

(i) in a case where the handicapped dependant has, for a period of one hundred and eighty-two days or more during the previous year, been admitted in a hospital or a nursing home or a medical institution or in such other institution as may be notified by the Central Government in the Official Gazette to be an institution for the care of handicapped persons, and fees and charges for his medical treatment (including nursing) are payable to such hospital or nursing home or medical or other institution, as the case may be, a sum of four thousand eight hundred rupees, or

(ii) in any other case, a sum of one thousand two hundred rupees."

52. For a scheme providing for hospitalisation and domiciliary hospitalisation benefit, refer Taxmann's Direct Taxes Circulars, Vol. 1, 1988 edn., p. 536.



[As amended by the Finance Act, 1989 and the Direct Tax Laws (Amendment) Act, 1989]