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Ref. No. KLI/22-23/E-BB/492
Ref. No. KLI/22-23/E-BB/490
Section 80D Deduction - Learn about the deductions that are permitted by section 80D of the Income Tax Act. Medical costs and health insurance premiums are tax deductible under Section 80d.
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. Let’s understand the nitty-gritty of Section 80D.
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. 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.
80D deductions are only connected with medical insurance policies. 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.
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.
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 are eligible to claim a tax deduction under Section 80D for yourself, your spouse, your kids, and your parents. In addition, as mentioned above, even HUFs are eligible to claim a deduction in this section. Any member of a HUF can claim a tax deduction on the amount paid towards the health insurance premium. This deduction is subject to the upper limit according to Section 80D of the Income Tax Act.
A deduction in respect of medical insurance premiums is allowed up to ₹25,000 per budgetary year for medical insurance premium installments. The policy can be either for you, your spouse or your children. If you or your spouse is a senior citizen (60 years of age or above), then the deduction limit will go up to ₹50,000. You will not be liable for tax exemptions if you make premium payments in cash.
Scenario |
Premium paid |
Maximum deduction under 80D ₹ 50,000 | |
Individual, children, and family |
Parents |
||
Individual and parents (below 60) |
₹25,000 |
₹25,000 |
- |
Individual and parents (below 60) and parents above (60) |
₹25,000 |
₹50,000 |
₹75,000 |
Both individual, family, and parents above the age of 60 years |
₹50,000 |
₹50,000 |
₹ 1 Lakh |
HUF members |
₹25,000 |
₹25,000 |
₹25,000 |
Non-residential member |
₹25,000 |
₹25,000 |
₹25,000 |
Deductions on Preventive Health Care Check-ups
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.
Can HUFs also avail of tax exemptions?
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.
Deduction on Health Insurance Premium Payments for Parents
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.
No Tax Benefit on Cash Payment
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.
In addition, you cannot claim a deduction under Section 80D.
The Annual Budget for 2020-21 laid down the following limits for Section 80D deductions:
The Annual Budget for 2020-21 laid down the following limits for Section 80D deductions:
Covered Individuals |
Premium paid for self, family, and children |
Premium Paid for parents |
80D Exemptions |
Individual 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 |
Individual, family, and parents < 60 years |
₹50,000 |
₹50,000 |
₹1,00,000 |
HUF members and NR individuals |
₹25,000 |
₹25,000 |
₹25,000 |
Mediclaim deductions under Section 80D happens 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
Section 80D permits a deduction of ₹5,000 rupees for any costs made for preventative medical examinations. This deduction will not exceed the overall limit of ₹25,000 or ₹50,000, depending on the situation. Additionally, the person may deduct this amount on his or her own behalf, that of their spouse, any dependent children, or that of their parents.
The premiums for the health riders on a term insurance policy that a policyholder purchased may be deducted under Section 80D, but the remaining payment must be deducted under other provisions of the Income Tax Act.
Categories |
Section 80C |
Section 80D |
Meaning |
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 lakh |
Up to ₹1 lakh |
Scope of Tax Benefits |
Higher tax benefits |
Lower tax benefits |
As per the Union Budget announced in 2018, the maximum amount of deduction in health premium was raised from ₹30,000 to ₹50,000 under Section 80D. Senior citizens can avail of this benefit. One of the core objectives of the Union Budget 2018 was to take care of the senior citizens in India. Moreover, there are also modifications related to the medical expenditure incurred by individuals aged above 60 and below 80.
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.
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 in this section, it’s 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 dependant, 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.
1. Look for the right coverage
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.
2. Keep it affordable
While it’s critical to get a health plan that fulfils your demands, it’s 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.
3. Prefer family over individual health plans
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.
4. Choose a plan with lifetime renewability
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.
5. Compare quotes online
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.
6. Network hospital coverage
Check to see if your favourite 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!
1. Can you make a cash payment for the premium paid for deductions?
It is impossible to claim a deduction on the premium amount paid in cash.
2. Is it possible to claim a deduction on the premium paid for your independent children?
No, deductions can only be claimed if you pay the premium for dependent children.
3. Can you claim a deduction if your spouse and parents are not dependent on you?
Yes, you can claim deductions even when your parents and spouse are independent.
4. Can you claim a deduction on the service tax paid on the insurance premium?
You cannot claim a deduction on the service tax amount because it is paid in addition to the premium and is collected by agencies.
5. Is it possible to claim deductions for health check-ups of dependents in your family?
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
6. What is the deduction limit under Section 80D of the Income Tax Act, 1961?
The breakdown of the deduction limits is as follows:
7. How much tax exemption can be availed under 80D?
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:
a. An individual or an individual with family (spouse & dependent children) can avail of a deduction of ₹25,000 per annum if the primary policyholder is below 60 years of age and ₹50,000 per annum if the primary policyholder is above 60 years of age.
b. Individuals can also claim tax deductions on the policy premiums paid towards the health insurance of their dependent parents. If the parents are below the age of 60, the applicable deduction is ₹25,000 per annum. However, if the parents are above 60 years of age, the maximum deduction is ₹50,000 per annum.
c. HUFs (Hindu Undivided Family) can also claim tax deductions up to ₹25,000 per annum. Also, they can claim an additional ₹25,000 for a separate policy for the dependent parents.
d. NRIs get a tax deduction of ₹25,000 for their own health insurance, along with an additional ₹25,000 for parents’ health coverage.
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.
8. Can I avail of tax benefits for more than one health insurance policy?
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.
9. How to fill 80D in Income Tax Return?
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.
10. Can medical bills be claimed under 80D?
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.
11. What can be claimed under 80D?
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.
12. How much is the rebate under section 80D?
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:
Ref. No. KLI/22-23/E-BB/999
Ref. No. KLI/22-23/E-BB/490
