Budget 2010-11 Scope of Section 80D widened to cover contribution to the central government health scheme

Under  the  existing  provisions  of  section  80D, deduction  in  respect  of  premium  paid  towards  a health insurance policy upto a maximum of Rs. 15,000 is available for self, spouse and dependent children. A further deduction of Rs. 15,000 is also allowed for buying an insurance policy in respect of dependent parents. The deduction is enhanced to Rs. 20,000 in both cases if the person insured is of age of 65 years or above.

The  Central  Government  Health  Scheme  (CGHS)  is  a  medical  facility  available  to  serving  and retired  Government  servants.  This  facility  is  similar  to  the  facilities  available  through  health insurance policies.

It is proposed to  also  allow deduction in respect of any contribution made  to CGHS by including such contribution under the provisions of section 80D. The deduction will be limited to the current aggregate as mentioned in the section.

This amendment is proposed to take effect from the Assessment Year 2011-2012.