Answer

ITR

Health insurance premium paid in cash

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  1. Facts

    No. 80D does not allow deduction for premium paid in cash. Only preventive check-up can be paid in cash.

  2. Provisions and law

    • Sec 80D, Income-tax Act 1961 (now Sec 126)Health insurance deduction up to ₹25,000 for self, spouse and children (₹50,000 if senior) and another ₹25,000 for parents (₹50,000 if senior), with ₹5,000 for preventive check-up inside these limits.

  3. Analysis

    Even if the insurer issued a receipt, a cash premium does not qualify. From the next renewal, pay by UPI, card, net banking or cheque. If you claim a cash premium and it is noticed, it will be disallowed and may draw penalty.

  4. Conclusion

    1. Check how the premium was paid.
    2. Do not claim cash premiums.
    3. Pay future premiums by non-cash modes.
    4. Keep payment proof.

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