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nism-series-xb-section-80d-preventive-health-checkup-deduction[ INVESTMENT ADVISER (LEVEL 2) ]

Under Section 126 of the Income-tax Act, 2025 (the erstwhile Section 80D of the Income-tax Act, 1961), what is the maximum deduction allowed for cash expenses incurred on 'Preventive Health Check-ups'?

[ A ]An additional ₹50,000 over and above the insurance premium limit.
[ B ]Zero deduction; checkups must be paid strictly through bank credit cards.
[ C ]Up to ₹1,50,000 (Section 123 limit (the erstwhile Section 80C)).
[ D ]Up to ₹5,000 per financial year (included WITHIN the overall Section 126 deduction ceiling (the erstwhile Section 80D) of ₹25,000 / ₹50,000 for self and parents).[ CORRECT ]
Takeaway

The correct answer is D: cash payments up to ₹5,000 per financial year for preventive health check-ups qualify, but this amount is absorbed within the overall Section 126 ceiling (the erstwhile Section 80D), not added on top of it.

Derivation
Section 126 of the Income-tax Act, 2025 (the erstwhile Section 80D of the Income-tax Act, 1961) permits a deduction for health insurance premiums (up to ₹25,000 for self/family, ₹50,000 if a senior citizen parent is covered), and within that same ceiling carves out room for up to ₹5,000 of preventive check-up spending -- notably the one Section 126 (erstwhile 80D) expense allowed to be paid in cash rather than by non-cash mode. The exam trap is assuming ₹5,000 is an additional, standalone benefit; it is not -- it simply eats into the existing ₹25,000/₹50,000 cap, so a client who has already exhausted the premium limit gains no extra deduction from a check-up.
Why the others fail
A — An additional ₹50,000 over and above the insurance premium limit.
₹5,000 is real, but it sits inside the existing Section 126 ceiling (the erstwhile Section 80D) -- it is not an extra ₹50,000 layered on top of the premium limit.
B — Zero deduction; checkups must be paid strictly through bank credit cards.
Backwards: preventive check-ups are the one Section 126 (the erstwhile Section 80D) expense the law specifically permits to be paid in cash.
C — Up to ₹1,50,000 (Section 123 limit (the erstwhile Section 80C)).
Confuses this with the unrelated Section 123 ceiling (the erstwhile Section 80C); Section 126's preventive check-up (the erstwhile Section 80D) sub-limit is capped at ₹5,000, not ₹1,50,000.