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ARN. No. KLI/23-24/E-BB/1201
Features
Ref. No. KLI/22-23/E-BB/999
Section 80 of the Income Tax Act 1961, provides various deductions from taxable income, helping individuals reduce their tax liability.
Safeguarding your health and well-being is essential in today’s fast-paced life. 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, reducing tax payable. Knowing the relevant sections is important to make the most of these deductions. Section 80D is a powerful provision that allows you to secure your health and 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.
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.
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:
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. Preventative health check-ups aim to detect any sickness and decrease risk factors early on by seeing a doctor regularly. Payments for preventative health check-ups are deducted at a rate of ₹5,000 under Section 80D. Depending on the situation, this deduction is limited to ₹25,000 - ₹50,000. Individuals can claim this deduction for themselves, their spouses, dependent children, or their parents. Also, cash can be used to pay for preventive health screenings.
Eligible modes of payment for Section 80D include the following:
However, premiums paid in cash are not eligible for deductions under Section 80D, except for payments made for preventive health check-ups. A maximum of ₹5,000 can be paid in cash for preventive health check-ups.
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 and 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 get annual health check-ups. The limit you are eligible for under Section 80D includes check-up costs. 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 per 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. However, the tax exemption is not for their expenses.
A prerequisite for getting tax benefits through these insurance policies is making premium payments through a cheque, draft, credit or debit card, online banking, etc. A tax benefit is not accessible for premium payments made in 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. 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.
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 if:
When a taxpayer pays a multi-year health insurance premium, the deduction under Section 80D is allowed proportionately over the years for which the policy is taken. For example, if a health insurance policy is purchased for three years and a lump sum premium of ₹30,000 is paid, the taxpayer can claim a deduction of ₹10,000 per year for three years. This approach ensures that the deduction benefits are spread out over the policy’s duration.
Section 80D also provides for the deduction of medical expenses incurred for senior citizens (aged 60 years or above) who are not covered by any health insurance. This is particularly beneficial for senior citizens who may find obtaining health insurance due to age or re-existing conditions challenging. The deduction for such medical expenses is ₹50,000 per financial year. This limit includes any premiums paid for health insurance and the medical expenses incurred.
Section 80DD allows for deductions related to the treatment and maintenance of a dependent with a disability. This includes expenses incurred for medical treatment, training, and rehabilitation of a dependent (such as a spouse, children, parents, or siblings) who has a disability. The deduction limits are as follows:
This deduction can be claimed if the taxpayer has incurred expenses or made deposits in specified schemes to maintain the disabled dependent.
Section 80DDB provides deductions for expenses incurred on treating specified illnesses for self or dependents (spouse, children, parents, and siblings). Some of the specified illnesses include cancer, chronic renal failure, hemophilia, and AIDS. The deduction limits are:
A prescription from a specialist doctor working in a government hospital is necessary to claim this deduction.
Critical illness insurance covers severe and life-threatening diseases like cancer, heart attack, stroke, and organ failure. The premium paid for critical illness insurance policies is also eligible for deduction under Section 80D. The same deduction limits apply as for regular health insurance:
This deduction is part of the overall limit under Section 80D, and there is no additional limit for critical illness policies.
The Income Tax Act consists of various sections that benefit individuals with tax savings and the government with making revenue for the country’s development. Section 80D and 80C are two of the most important sections of the Income Tax Act. Take 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 various tax-saving investments, such as ULIP, PPF, ELSS, EPF, and LIC premiums. |
Section 80D deduction is allowed for 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 |
Exclusions are an important part of Section 80D, where exceptional circumstances are placed. These include the following:
Section 80DDB includes tax deductions for specific disorders 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 they paid 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 to 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 various medical issues. When purchasing health insurance for your family, ensure each plan member is catered to. Choose a plan that meets your needs, consider your requirements, evaluate plans based on benefits and pricing, and exercise some due diligence.
While getting a health plan that fulfills your demands is critical, 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, 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 and whether it offers restricted renewability. Why? Since your need for a health plan will be greater as you age,
You can compare health insurance plans online to ensure you buy one 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 offers financial protection during medical emergencies and 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 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 can 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
You cannot pay cash for a premium and claim the full tax deduction. There are a few exceptions, but in most cases, the payment method for claiming a deduction on a premium depends on the specific tax deduction you are referring to.
3
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.
7
The breakdown of the deduction limits is as follows:
8
The Indian Income Tax Act lays down the various deductions 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 individuals and parents are senior citizens) for the premiums paid against health insurance coverage. These limits include 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 must ensure that you meet all eligibility conditions and that premium payments for all insurance policies are current. If the claim amount is more extensive than the sum insured under the policy on which you made the first claim, you can claim the balance 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 easy 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. To be eligible to submit the medical expense claim, the person must be at least 60 years old.
12
A person may deduct the cost of their health insurance premiums and 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 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:
14
Hindu Undivided Families (HUFs) can claim tax exemptions under Section 80D of the Income Tax Act for premiums paid on health insurance policies. The exemption limit is ₹25,000 per financial year, increasing to ₹50,000 if the insured member is a senior citizen.
Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.
Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors
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
The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The content has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Further customer is the advised to go through the sales brochure before conducting any sale. Above illustrations are only for understanding, it is not directly or indirectly related to the performance of any product or plans of Kotak Life.
