24. Amendment of section 80D.
In section 80D of the Income-tax Act, with effect from the 1st day of April, 2019,-
(A) in sub-section (2),-
(i) for the words “thirty thousand rupees” wherever they occur, the words “fifty thousand rupees” shall be substituted;
(ii) in the first proviso occurring after clause (d), the word “very” shall be omitted;
(B) in sub-section (3),-
(i) for the words “thirty thousand rupees” at both the places where they occur, the words “fifty thousand rupees” shall be substituted;
(ii) the word “very” shall be omitted;
(C) in sub-section (4),-
(i) the words “or a very senior citizen” shall be omitted;
(ii) for the words “thirty thousand rupees”, the words “fifty thousand rupees” shall be substituted;
(D) after sub-section (4), the following sub-section shall be inserted, namely:––
‘(4A) Where the amount specified in clause (a) or clause (b) of sub-section (2) or clause (a) of sub-section (3) is paid in lump sum in the previous year to effect or to keep in force an insurance on the health of any person specified therein for more than a year, then, subject to the provisions of this section, there shall be allowed for each of the relevant previous year, a deduction equal to the appropriate fraction of the amount.
Explanation.-For the purposes of this sub-section,-
(i) “appropriate fraction” means the fraction, the numerator of which is one and the denominator of which is the total number of relevant previous years;
(ii) “relevant previous year” means the previous year beginning with the previous year in which such amount is paid and the subsequent previous year or years during which the insurance shall have effect or be in force.’;
(E) in the Explanation occurring after sub-section (5), clause (ii) shall be omitted.
Notes on Clauses:
Clause 24 of the Bill seeks to amend section 80D of the Income-tax Act relating to deduction in respect of health insurance premia.
The said section, inter alia, provides that for medical insurance or preventive health check-up of a senior citizen, deduction of thirty thousand rupees shall be allowed. Further, in the case of very senior citizens, the said section also provides for a deduction of medical expenditure within the overall limits of thirty thousand rupees.
It is proposed to amend the said section so as to provide that the deduction of fifty thousand rupees in aggregate shall be allowed to senior citizens in respect of medical insurance or preventive health check-up or medical expenditure.
It is further proposed to provide that where an amount is paid in lump sum in the previous year to effect or to keep in force an insurance on the health of a person specified therein for more than a year, then, subject to the provisions of this section, there shall be allowed for each of the relevant previous years, a deduction equal to the appropriate fraction of the amount.
It is also proposed to define the expressions "appropriate fraction"and"relevant previous years".
These amendments will take effect from 1st April, 2019 and will, accordingly, apply in relation to the assessment year 2019-2020 and subsequent years.
