Burden of medical expenses incurred towards health insurance premium can be reduced through tax deduction under section 80D of the Income Tax Act, 1961. As per the Income Tax Act, 1961 investments made towards payment of health insurance premiums, qualify for a tax deduction under section 80D. The deduction is allowed to Individual and Hindu undivided Family (HUF), for making a payment to effect or 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 where the assessee is an individual or on the health of any member of the family where the assessee is a HUF. The deduction can be claimed on total income computed for calculation of income tax, of an amount paid as a premium for medical insurance if the following conditions are satisfied:

• Insurance premium is paid in accordance with the scheme framed in this behalf by the General Insurance Corporation of India (known as Mediclaim Insurance Policy) and approved by the Central Government or in accordance with a scheme framed in this behalf by any other insurer and approved by Insurance Regulatory and Development authority.
• Payment is made by any mode other than cash.
• Payment is made out of income chargeable to tax.

Amount of Deduction Mediclaim policy taken on the health of individuals less than 65 years of age, amount of health insurance premium paid or Rs. 15,000, whichever is lesser. Mediclaim policy taken on the health of senior citizens above 65 years, amount of health insurance premium paid or Rs. 20,000, whichever is lesser. Additional deduction of Rs 15,000 could be claimed, for buying health insurance policy for parents (Rs 20,000 if either of parents is a senior citizen). This is irrespective of whether they’re dependent on you or not. Tax Returns for Financial Year 2010 -11 (March 2011) has started. Request you to please visit Taxmantra.com or mail us Form16/ Salary Certificate and details of other income, at info@taxmantra.com . We would take it from there to file your return of income. Taxmantra.com provides complete online taxation solutions for individuals ( Tax Returns + Tax Support + Tax Planning ) – please see this – Services Offered. Taxmantra.com- Providing Complete Online Tax Solutions for Individuals, Not Just Returns.