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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
Section 80D of the Income Tax Act 1961 can help you save money while staying protected through health insurance.
Section 80D of Income Tax Act 1961 allows you to save on taxes by claiming deductions on the health insurance premiums you pay. This section not only covers health insurance premiums for you but also for your spouse, children, and even parents. If you or any insured family member is 60 years or older, this amount goes up to ₹50,000.
If you pay for your parent’s health insurance, you can claim another ₹25,000 or ₹50,000 if they are senior citizens. Plus, you can also claim ₹5,000 for preventive health check-ups for your family every year. So, in total, your savings can be significant! The best part? This deduction is on top of the ₹1,50,000 limit allowed under Section 80C, giving you even more tax-saving opportunities!
It is also helpful for Hindu Undivided Families (HUFs), allowing them to claim medical insurance premiums tax deductible as well.
Wondering if you qualify for this deduction? The answer is simple. Any individual or a HUF/ Hindu Undivided Family who pays for health insurance premiums can claim deductions under Section 80D. This applies to premiums paid for:
Now that you know who is eligible, let us explore what deductions are allowed under this section.
Under Section 80D, you can claim tax deductions for different types of payments related to health insurance and medical expenses:
You can claim deductions for the health insurance premium you pay for yourself, your spouse, your children, and your parents. This is the most common deduction under Section 80D.
If you spend money on preventive health check-ups (for example, regular doctor visits to make sure everything is okay), you can also claim a deduction for that.
If your parents or elderly family members (above 60 years old) do not have health insurance, you can still claim deductions for the money you spend on their medical treatment.
Contributions you make towards certain government-backed health insurance schemes are also eligible for deductions under Section 80D.
The amount you can claim as a deduction depends on who you are buying health insurance for and their age.
For example, imagine Ramesh, a 45-year-old, purchases health insurance and pays an annual premium of ₹28,000. According to Section 80D, since Ramesh is under 60, he can claim a tax deduction of only ₹25,000. The extra ₹3,000 he spent will not be eligible for deduction under this section.
On the other hand, Ramesh’s mother, who is 63 years old, has a health insurance policy with a premium of ₹55,000. Because she is a senior citizen, she can claim a tax deduction of ₹50,000 under Section 80D. The remaining ₹5,000 of her premium will not be eligible for a deduction.
The same limits apply to Non-Resident Indians (NRIs). If an NRI is under 60, they can claim a deduction of up to ₹25,000 for health insurance premiums paid in a financial year. If they are 60 years or older, they can claim up to ₹50,000.
Under Section 80D, you can claim deductions based on the health insurance premiums you pay for yourself, your family, and your parents. The amount you can save on taxes depends on the age of the insured individuals. Here is a quick summary of the deductions allowed under this section of the Income Tax Act 1961:
Covered Individuals | Premiums Paid for Self, Family & Children (₹) | Premium Paid for Parents (₹) | Total Tax Exemption u/s 80D (₹) |
---|---|---|---|
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 |
Individual, family, and parents > 60 years | 50,000 | 50,000 | 1,00,000 |
Members of HUF and NRIs < 60 years | 25,000 | 25,000 | 25,000 |
Members of HUF and NRIs > 60 years | 50,000 | 50,000 | 50,000 |
80D deductions are connected with medical insurance policies for individuals and families. These deductions are mentioned as follows:
Preventive health check-ups are regular medical exams that help catch illnesses early and reduce the chances of more serious health problems. The government, understanding the importance of these check-ups, introduced tax deductions for them in FY 2013-14. This was done to encourage people to take better care of their health by getting these preventive health check-ups.
According to Section 80D, you can claim a tax deduction of up to ₹5,000 per year for expenses related to preventive health check-ups. But there is a catch! This ₹5,000 deduction is not extra but a part of the overall Section 80D maximum limit.
Let us simplify this with an example. Meet Priya, who is 40 years old. She has a family consisting of her husband (42), two children (ages 12 and 8), and her parents (ages 65 and 63). Priya has spent money on health insurance and preventive health check-ups for her entire family this year. Here is a breakdown of what Priya paid:
Let us now see how much of the tax deduction Priya can claim under Section 80D.
Expenses | Actual Expense | Maximum Deduction Under 80D | Total Deduction Allowed |
---|---|---|---|
Health Insurance Premium for Self, Spouse, Children | ₹30,000 | ₹25,000 | ₹25,000 |
Preventive Health Check-up for Self, Spouse, Children | ₹15,000 | ₹5,000 | ₹5,000 |
Total Expense for Self, Spouse, Children | ₹45,000 | ₹25,000 | ₹25,000 |
Health Insurance Premium for Senior Citizen Parents | ₹47,000 | ₹50,000 | ₹47,000 |
Preventive Health Check-up for Senior Citizens | ₹10,000 | ₹5,000 | ₹3,000 |
Total for Parents (Senior Citizens) | ₹57,000 | ₹50,000 | ₹50,000 |
Total Deduction Available | ₹75,000 |
In this case, even though Priya spent ₹1,02,000 in total, she can only claim ₹75,000 as tax deductions under Section 80D for the financial year.
When claiming tax benefits under Section 80D, it’s essential to know how to make payments to qualify for deductions. Not every payment method is eligible, so understanding the acceptable modes can help you avoid any mistakes. Here’s a table that simplifies which payment modes are accepted for different expenses under this section:
Expense | Modes of Payment Allowed |
---|---|
Health Insurance Premiums | Debit card, credit card, net banking, cheque, UPI – No cash |
Preventive Health Check-ups | All modes of payment (including cash, debit/credit card, UPI) |
Note that you cannot pay for health insurance premiums in cash if you want to claim deductions. However, preventive health check-ups are more flexible and allow various payment methods. Always ensure you use the right payment method to maximize your deductions under Section 80D.
Section 80D tax benefit allows individuals and Hindu Undivided Families (HUF) to deduct certain expenses from taxable income. You can deduct the cost of your health insurance tax benefit 80D premium and the cost of your own, your spouse’s, your children’s, and your parents’ annual preventative health exams. Here are some details about tax benefits under section 80D deductions:
You will be eligible for a tax deduction under Section 80D if you get annual health check-ups. You can claim up to ₹5,000 annually for preventive health check-ups for yourself, your spouse, children, and your parents.
The premiums paid on a mediclaim insurance 80D 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 for 80D deduction for senior citizens 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 80D tax exemption on cash payments is that preventive health check-ups can be paid through cash.
Here is a simple example to understand 80D deductions better. 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 max deduction under 80D that he can claim? Let us understand:
As a result, his total 80D deduction will be ₹60,000 for the year, helping him save big on taxes.
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 this section 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 challenging due to age or pre-existing conditions. 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 1961 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.
Exclusions are an important part of Section 80D, where exceptional circumstances are placed. These include the following:
Section 80DDB includes income 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 Section 80D medical expenditures 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, and coverage for diseases you may be more susceptible to. It should be based on your family’s medical history and protect 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 health insurance plan at an affordable initial cost can help ensure adequate protection while keeping the premiums manageable. With changing income, family size, and needs, you can review your plan and extend coverage as necessary.
Individual plans are good for people 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 have 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 Section 80D 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.
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.
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