There is a deduction over and above deduction limit of Rs. 1.50 Lakh u/s 80C. It is u/s 80D for mediclaim payment.  Deduction is available towards following payment

1. Medical insurance premium (including preventive health check-up); and
2. Medical expenditure.

Deduction can be claimed by

1. An Individual; and
2. Hindu Undivided Family (HUF).

For Individual:

Following deductions are available to an individual –

1. Amount paid towards medical insurance premium or amount paid for preventive health check-up of the Taxpayers or his family (here, family means spouse and dependent children) up to a maximum amount of Rs.  25,000.

It should be noted here that in case of prevent health check-up maximum amount of Rs.  5,000 is allowed as a deduction, however, the same is included in the overall maximum deduction of Rs.  25,000.

2. Amount paid towards medical insurance premium or amount paid for preventive health check-up of parents of the Taxpayers up to a maximum amount of Rs.  25,000.

It should be noted here that in case of prevent health check-up maximum amount of Rs.  5,000 is allowed as a deduction, however, the same is included in the overall maximum deduction of Rs.  25,000.

3. Amount paid towards medical expenditure for self or any member of the family of the taxpayers up to a maximum amount of Rs.  50,000.
4. Amount paid towards medical expenditure for parents of the taxpayers up to a maximum amount of Rs.  50,000.

Providing the above provisions in tabular format for better understanding–

FOR HUF:

Following deduction is available to a Hindu Undivided Family (HUF)–

1. Amount paid towards medical insurance premium of any member of the Hindu Undivided Family up to a maximum amount of Rs.  25,000.
2. Amount paid towards the medical expenditure of any member of the Hindu Undivided Family up to a maximum amount of Rs.  50,000.

FOR SENIOR CITIZEN INDIVIDUALS (Individual resident in India who is of the age of 60 years or more at any time during the relevant previous year):

The treatment of available deduction under section 80D is different in case of a senior citizen. The treatment of deduction in case of a senior citizen is explained in the below-mentioned table –

MEDICLAIM PAYMENT IF MADE IN LUMPSUM:

In order to give corrective deduction in case of the insurance premium which is paid on the lump-sum basis, sub-section (4A) has been inserted to section 80D. It should be noted that the newly inserted sub-section (4A) to section 80D is effective from 1^st April 2019.

According to said sub-section, in case of a lump-sum payment of insurance premium, in a previous year to effect or to keep in force an insurance on the health of a specified person for more than a year, the deduction shall be allowed equal to the appropriate fraction of the amount for each of the relevant previous year.

NOTE THAT ONLY PAYMENT IMADE IN CHEQUE IS ELIGIBLE FOR MEDICLAIM POLICY. FOR REVENTITVE HEALTH CHECK UP, EVEN CASH PAYMENT IS ALLOWED.