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ARN. No. KLI/23-24/E-BB/1201
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Ref. No. KLI/22-23/E-BB/999
Learn more about the deductions permitted by section 80D of the Income Tax Act with this blog.
In today’s fast-paced life, safeguarding your health and well-being is of utmost importance. Medical emergencies can arise unexpectedly, and the cost of quality healthcare can be substantial. To address this concern and encourage individuals to prioritize their health, the government offers attractive tax benefits under Section 80D of the Income Tax Act, India.
The Income Tax Act 1961 allows income tax deductions for individuals, which reduces the amount of tax payable. It is important to know about the relevant sections to make the most of these deductions. Section 80D is a powerful provision that allows you to not only secure your health but also save on your income tax liabilities. Whether you are an individual or a family, availing of health insurance and making the most of Section 80D can be a win-win situation for you and your loved ones. If you wish to know how you will benefit from this section, read on to know more about Section 80D deductions and the tax deductions offered.
Section 80D of the Income Tax Act provides 80D deductions on the medical insurance premiums paid for you and your family members. You can claim a tax deduction for the health insurance premium paid for yourself, your parents, your children, and your spouse. Moreover, this section also allows Hindu Undivided Families (HUFs) to claim 80D deductions.
Family is the pillar of any individual’s life. You earn for them, you spend for them, and you invest for their future. Health emergencies are one of the scenarios where you are supposed to support your spouse, children, or parents financially and emotionally. Purchasing a health policy, taking them for preventive check-ups, and paying for medical bills are some of the investments you make for your loved ones. Section 80D considers the following:
The maximum amount of deduction in health premiums was raised from ₹30,000 to ₹50,000 under Section 80D. Senior citizens can avail of this benefit. This rise in the tax deduction amount is a welcome change for senior citizens and for those who pay health insurance premiums for senior citizens.
80D deductions are connected with medical insurance policies for individuals and families. These deductions are mentioned as follows:
In 2013-14, the government implemented a preventative health check-up deduction to encourage citizens to be more health-conscious. The goal of preventative health check-ups is to detect any sickness and decrease risk factors early on by seeing a doctor on a regular basis. Payments for preventative health check-ups are deducted at a rate of ₹5,000 under Section 80D. This deduction is limited to ₹25,000 - ₹50,000, depending on the situation. Individuals can claim this deduction for themselves, their spouses, their dependent children, or their parents. Also, cash can be used to pay for preventive health screenings.
Section 80D tax benefit allows individuals and Hindu Undivided Families (HUF) to deduct certain expenses from taxable income. A person may deduct the cost of their health insurance tax benefits 80D premium as well as the cost of their own, their spouse’s, their dependent children’s, and their parents’ annual preventative health exams. Here are some details about tax benefits under section 80D deductions:
You will be eligible for a tax reduction if you are getting health check-ups done annually. The limit that you are eligible for under Section 80D will include the costs for check-ups. The limit on check-up expenses is up to ₹5000 for individuals below 60 years of age and ₹7000 for senior citizens for each budgetary year.
The premiums paid on a medical insurance policy for parents/guardians are qualified to deduce up to ₹25,000 in every financial year. If your mother/father/guardian is a senior citizen, the maximum limit goes up to ₹50,000 a year. The limit will additionally include ₹7000 for the expenses incurred through annual health check-ups. Individuals who are super-senior citizens (80 years or above) and do not have an insurance policy can avail of a tax deduction of up to ₹50,000 every financial year for annual medical check-ups and hospital treatments. But the tax exemption is not for their expenses.
A prerequisite for getting the tax benefits through these insurance policies is that you must make premium payments through a cheque, draft, credit or debit card, online banking, etc. A tax benefit is not accessible for the premium payments made through cash. The only exception for tax exemption on cash payments is that preventive health check-ups can be paid through cash.
Rohan is 45 years old, and his father is 75 years old. Rohan has taken out medical insurance for himself and his father, paying ₹30,000 and ₹35,000 in premiums, respectively. What is the maximum deduction he can claim under Section 80D?
Rohan is eligible for reimbursement of ₹25,000 for the premium he paid on his coverage. Rohan can claim ₹50,000 from his father’s senior citizen insurance policy. The deductions, in this case, are ₹25,000 and ₹35,000. As a result, he can claim a total deduction of ₹60,000 for the year.
You can claim a tax deduction under Section 80D for yourself, your spouse, your children, and your parents. HUFs can also claim a deduction under this section. Subject to the maximum allowed by Section 80D of the Income Tax Act, any member of a HUF may claim a deduction on the amount paid towards the premium for health insurance. Here are the scenarios for the eligible deductions:
Akin to individual taxpayers, Hindu United Families (HUFs) are also allowed to claim tax exemptions for all or any members under section 80D of the Income Tax Act. A HUF can claim a deduction under Section 80D for an insurance policy taken for a family member. The deduction amount will be ₹25,000 if the insured member is younger than 60 years of age. It will be ₹50,000 if the insured member is 60 years of age or above.
Section 80D allows a deduction of up to ₹25,000/ ₹50,000 for health insurance premiums and preventive health check-ups for self, spouse, children, and parents.
The premiums for the health riders on a term insurance policy purchased by a policyholder can be deducted under Section 80D. Still, the remaining payment must be deducted under other provisions of the Income Tax Act. Have a look at the limits of deduction under section 80D for different scenarios:
In addition, you cannot claim a deduction under Section 80D.
Although the annual budget always brings up different provisions of tax savings for individuals from different sections of society. There are certain limitations for deductions. Following are the limits for Section 80D deductions:
Covered Individuals |
Premium paid for self, family, and children |
Premium Paid for parents |
80D Exemptions |
Individuals and parents > 60 years |
₹25,000 |
₹25,000 |
₹50,000 |
Individual and family > 60 years but parents < 60 years |
₹25,000 |
₹50,000 |
₹75,000 |
Individuals, family, and parents < 60 years |
₹50,000 |
₹50,000 |
₹1,00,000 |
HUF members and NR individuals |
₹25,000 |
₹25,000 |
₹25,000 |
Exclusions are an important part of Section 80D, where exceptional circumstances are placed. These include the following:
The government introduced Section 80D of the Income Tax Act to encourage people to take health insurance. The deduction under Section 80D is available for the premium paid for health insurance policies that cover hospitalization expenses.
There are two reasons why the government introduced this deduction.
By allowing people to deduct the cost of preventive health check-ups, the government is encouraging people to get regular checkups and detect any health problems early. This can help to reduce the overall cost of healthcare in the country.
The cost of health insurance can be high, especially for families with dependents. By allowing people to deduct the cost of health insurance premiums from their taxable income, the government is making it easier for people to afford health insurance.
The deduction under Section 80D is a valuable tax benefit for taxpayers who have health insurance. It can help to reduce their taxable income and save them money on their taxes. Here are some other reasons why the government introduced Section 80D:
Mediclaim deductions under Section 80D happen so that the medical insurance policy remains active. The insurance policy can be in either your name or your spouse’s name. You must note that apart from saving taxes, a health insurance plan plays a pivotal role in taking care of your medical expenses if you fall sick and need medical assistance.
The Income Tax Act consists of various sections that benefit individuals with tax savings and the government with making revenue for the development of the country. Section 80D and 80C are two of the most important sections of the Income Tax Act. Have a look at the table below to know the difference between these two sections.
Categories |
Section 80C |
Section 80D |
Purpose |
Section 80C offers tax deductions on different types of tax-saving investments, such as ULIP, PPF, ELSS, EPF, LIC premium, etc. |
Section 80D deduction is allowed for availing tax exemptions on health insurance premiums paid for self, family, & parents and expenses incurred on preventive health check-ups. |
Maximum Tax Deduction Limit |
Up to ₹1.5 lakhs |
Up to ₹1 lakh |
Scope of Tax Benefits |
Higher tax benefits |
Lower tax benefits |
Tax deductions for specific disorders are included in Section 80DDB for individuals and members of HUF. This section states that medical expenses for treating a particular sickness or ailment borne by an individual or a member of HUF are eligible for a deduction under Section 80DDB, subject to the stipulations and cap set forth. This means that any medical expenditures paid by them towards medical treatment or maintenance of health due to any specific disorder are applicable for the deduction.
When discussing medical costs, it is important not to mistake them with the premiums for health insurance policies that cover the specific diseases or afflictions being discussed. In addition, the age of the person for whom the medical expense/treatment is incurred determines the amount that may be claimed as a deduction under section 80DDB.
The deduction amount is limited to the actual amount spent or ₹40,000, whichever is less when medical treatment costs are incurred for an individual, his dependent, or a member of a HUF. However, this deduction amount is ₹1,00,000 or the actual amount, whichever is less for senior (60 or above) and super senior (80 and above) citizens.
It is important to have medical insurance to protect yourself during health emergencies. Medical emergencies can drain your savings and lead you to a situation where continuing medical treatment can become difficult. To avoid such situations, you should purchase a health plan that can protect your savings and support you during medical emergencies. Take a look at some important points to consider before buying medical insurance:
Select a health plan that offers advantages like pre- and post-hospitalization, childcare costs, transportation, coverage for diseases you may be more susceptible to, based on your family’s medical history, etc., and protects you against a wide range of medical issues. When purchasing health insurance for your family, ensure each member of the plan is catered to. To choose a plan that meets your needs, consider your requirements, evaluate plans based on benefits and pricing, and exercise some due diligence.
While it is critical to get a health plan that fulfills your demands, it is also crucial to fit within your budget. When purchasing health insurance, a person’s budget is a crucial consideration. However, you should consider the plan’s benefits before considering how much it would cost. Purchasing a reasonably cost health insurance plan upfront can ensure that you are appropriately protected and that the premiums are reasonable. With changing income, family size, and needs over time, you can review your plan and extend coverage as necessary.
Individual plans are good for individuals who do not have a family to support. However, if you are buying health insurance keeping your family in mind, purchase a family health plan to enjoy maximum benefits at a more affordable price.
Make it important to ask how long the plan will cover you when you purchase a health plan, as well as whether it offers restricted renewability or not. Why? Since your need for a health plan will be greatest as you age.
You can compare health insurance plans online to ensure you buy a health plan that satisfies your needs. You may also “get a quotation” online, which involves providing your details to get a ballpark figure for the cost of your coverage. Choose the finest quotes, compare them, and make a selection.
Check to see if your favorite hospitals and medical professionals are part of the hospital network of the health plans you’ve chosen. You can select from 5,000+ network hospitals to receive rapid, convenient, and cashless claims settlement!
Health insurance not only offers financial protection during medical emergencies but also promotes a healthier lifestyle by encouraging regular health check-ups. It aligns with the government’s objective of providing healthcare access to all and reducing the overall burden of healthcare costs. Understanding the nuances of Section 80D empowers you to make informed decisions while choosing health insurance plans and maximizing your tax savings. Whether you are an individual or part of a HUF, you can benefit from these tax exemptions by investing in comprehensive health coverage.
1
You are eligible to claim an additional 80D income tax deduction of ₹5,000 for the expenses associated with health check-ups. This includes all expenses for a check-up of the entire family.
2
It is impossible to claim a deduction on the premium amount paid in cash.
3
No, deductions can only be claimed if you pay the premium for dependent children.
4
Yes, you can claim deductions even when your parents and spouse are independent.
5
You cannot claim a deduction on the service tax amount because it is paid in addition to the premium and is collected by agencies.
6
Yes, you can claim a health check-up deduction of up to ₹5,000 inclusive of all the dependents in your family. However, this facility is not available separately for every individual family member.
Now that you have a clear idea of what 80D is in income tax, you must ensure that you avail of the tax deduction in this section if you are paying health insurance premiums for yourself, your spouse, dependent children, and your parents
7
The breakdown of the deduction limits is as follows:
8
The Indian Income Tax Act lays down the various deductions available against the premium paid for health coverage under Section 80D. To get a better idea about the exemptions you can avail yourself of under this section, you can refer to the following:
Thus, a resident Indian can claim up to ₹1,00,000 as a tax deduction per annum (both individual and parents are senior citizens) for the premiums paid against health insurance coverage
All these limits are inclusive of the exemption for annual health check-ups ₹5000 for individuals and families and ₹7000 for senior citizens.
9
Yes, you can avail tax exemptions for multiple health insurance policies. You will need to ensure that you meet all eligibility conditions and that the premium payments are up to date for all the insurance policies. If the claim amount is more extensive than the sum insured under the policy on which you have made the first claim, you will have the option to claim the balance amount from the second policy. You must keep this in mind when filing under multiple policies.
10
Claiming your tax deduction under the Income Tax Act is now an easy process with the ‘Prepare and Submit Online’ option. To fill 80D in ITR, you only have to keep your documents handy and follow some easy steps:
11
Yes. Medical bills can be claimed under 80D, the policyholder can avoid paying taxes by deducting the cost of medical insurance for themselves, their spouses, and their dependent parents from their income. For the person to be eligible to submit the medical expense claim, they must be at least 60 years old.
12
A person may deduct the cost of their health insurance premiums as well as the cost of their own, their spouse’s, their dependent children’s, and their parents’ annual preventative health exams. The terms and conditions outlined in Section 80D of the Income Tax Act of 1961 apply to this.
13
If both the policyholder and family contain senior citizens, a deduction of up to ₹1,00,000 can be made on the cost of health insurance premiums. However, this rebate under Section 80D is subject to change depending on the following circumstances:
Pay 10,000/month for 10 years, Get 1,65,805/Year* for next 15 years.
ARN. No. KLI/23-24/E-BB/1201
Features
Ref. No. KLI/22-23/E-BB/999