Close

Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak e-Invest

Insurance and Investment in one plan.

Kotak e-Term

Protect your family's financial future.

Kotak Guaranteed Fortune Builder

A plan that offers guaranteed income for your future goals.

Kotak T.U.L.I.P

A plan that works like a term plan, and Earns like ULIP Plan.

Kotak Assured Savings Plan

A plan that offer guaranteed returns and financial protection for your family.

Kotak Assured Pension

A plan that offers immediate or deferred stream of income

Kotak Lifetime Income Plan

Retirement years are the golden years of life.

Kotak Guaranteed Savings Plan

A plan that offers long term savings and life cover.

Close

Get a Call

Enter your contact details below and we will get in touch with you at the earliest.

  • Select your Query

Thank you

Our representative will get in touch with you at the earliest.

Section 80D - Medical and Health Insurance Tax Benefits Under Section 80D

Learn more about the deductions permitted by section 80D of the Income Tax Act with this blog.

  • 144,137 Views | Updated on: Mar 18, 2024

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.

What is 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.

What Investment Comes Under Section 80D?

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 premiums you pay on a health insurance policy and the expense spent on preventive health check-ups can be claimed as deductions under Section 80D of the Indian Income Tax Act.
  • Individuals can also claim deductions against the health insurance premium paid for their parents’ policies. The extent of deductions will depend upon the age of the primary policyholder.
  • Health-based riders, such as critical illness cover available with life insurance plans, also come under the purview of Section 80D of Income Tax Act 1961.

Increase in Tax Deduction Limit According to Section 80D

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.

Deductions As Per Section 80D: Medical Expenditure Deduction

80D deductions are connected with medical insurance policies for individuals and families. These deductions are mentioned as follows:

  • If you pay insurance premiums for yourself, your spouse, and your kids, you can claim a maximum tax deduction of ₹25,000 per annum. In the case of senior citizens, the limit is ₹50,000 a year.
  • If you pay health insurance premiums for your parents, you can claim a maximum tax benefit of ₹25,000 per year if your parents are less than the age of 60. However, if your parents are senior citizens, you can claim a tax benefit of up to ₹50,000 per year.

Preventive Health Check-up Deductions Under Section 80D

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.

Tax Benefits Under Section 80D of the Income Tax Act, 1961

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:

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.

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.

Example for 80D deductions

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.

Eligibility for Tax Deduction Under Section 80D of the Income Tax Act,1961

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:

  • Individuals and HUF (Hindu Undivided Family) can file for a tax claim deduction from taxable income under Section 80D.
  • If you pay premiums for health insurance coverage that you, your spouse, your children, or your parents have purchased, you will be qualified for a tax deduction under Section 80D.
  • If you are making payments for the treatment or medical check-ups of your parents above the age of 80, you will be eligible for tax exemption. But, for these cases, you must ensure that your parents do not have a separate health insurance policy.
  • All deductions are subject to the prevailing guidelines under Section 80D of the Income Tax Act.

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.

Section 80D Deduction Limit

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:

  • For self and family: ₹25,000 tax deduction + ₹5,000 health check-up, which sums up to ₹30,000.
  • For self, family, and parents: ₹50,000 tax deduction + ₹5,000 health check-up exemption, which sums up to ₹55,000
  • For self, family, and senior citizen parents: ₹75,000 tax deduction + ₹5,000 health check-up exemption, which takes the total tax deduction to ₹80,000
  • For self (senior citizen), family, and senior citizen parents: ₹1 lakh tax deduction + ₹5,000 health check-up exemption, which increases the deduction amount to ₹1.05 lakh,

In addition, you cannot claim a deduction under Section 80D.

  • If cash is used to pay the health insurance premium. Cash can be used to cover medical expenses.
  • In the event that payment is paid on behalf of a working child, sibling, grandmother, or another family.
  • The employer paid the employee’s group health insurance premium.

Section 80D Deductions for FY 2022-23 & AY 2023-24

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

What are the Exclusions Under Section 80D?

Exclusions are an important part of Section 80D, where exceptional circumstances are placed. These include the following:

  • If you are making payments on your grandparents’, siblings’, or working children’s behalf, you cannot avail of the tax benefits. This is applicable to any other relative not explicitly covered under your policy.
  • If you make health insurance premium payments through cash, you will not be eligible for health insurance tax benefits. Preventive health benefits can be availed even with cash payments.
  • If the company makes a group health insurance premium payment on the employee’s behalf (non-contributory), it won’t be eligible for tax exemption. However, if the taxpayers choose to make extra premium payments to improve the group cover (contributory), they can claim tax benefits on the additional amount they paid.
  • You will not be liable to receive any tax benefits on GST and Cess charges levied on premium payments.

Reason Behind Deduction According to Section 80D

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.

Promoting Preventive Healthcare

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.

Helping People Afford Health Insurance

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:

  • To reduce the monetary burden of healthcare on individuals and families.
  • To promote the growth of the health insurance industry in India.
  • To encourage people to take preventive measures to stay healthy.

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.

Difference Between Section 80D and Section 80C

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

Income Tax Exemption Under Section 80DDB

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.

How to Buy Medical Insurance for Maximum Benefits?

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:

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.

Keep It Affordable

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.

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.

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.

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.

Network Hospital Coverage

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!

Wrapping It Up

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.

Key Takeaways

  • Section 80D of the Income Tax Act allows tax deductions on health insurance premiums paid for yourself, your family, including your parents.
  • Investments covered under Section 80D include health insurance premiums, preventive health check-ups, and health-based riders, promoting preventive healthcare and making health coverage more affordable.
  • Deduction limits under Section 80D vary based on the insured individual’s age, providing higher tax benefits for senior citizens and their parents.
  • It offers deductions for preventive health check-ups, encouraging individuals to stay proactive about their health and well-being.
  • Cash payments for health insurance premiums are not eligible for tax benefits, except for preventive health check-ups.

FAQs


1

What are the Additional 80D Deductions?

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

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.


3

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.


4

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.


5

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.


6

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


7

What is the deduction limit under Section 80D of the Income Tax Act, 1961?

The breakdown of the deduction limits is as follows:

  • Individuals (below 60 years) with spouses and dependent children will get a deduction of up to ₹25,000 every year.
  • Individuals (above 60 years) with spouses and dependent children will get a deduction of up to ₹50,000 every year.
  • Individuals buying a separate policy for their dependent parents can claim an additional ₹25,000 if both parents are below 60 years of age.
  • In case one of the parents is a senior citizen (above 60 years of age), the individual can claim up to ₹50,000 as a tax deduction.
  • Hindu Undivided Family (HUFs) can claim up to ₹25,000 every year and an additional ₹25,000 for a separate senior citizen policy.
  • Individuals can claim ₹5000 (below 60 years) or ₹7000 (above 60 years) as Preventive Health Check-ups, subject to the total deduction falling under the above-mentioned limits.


8

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:

  • 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.
  • 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.
  • 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.
  • 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.


9

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.


10

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:

  • Visit the ITR e-Filing portal and log in.
  • Under the e-File menu and go to the Income Tax Return link.
  • Select the Assessment Year, ITR Form Number, and Filing Type.
  • Opt for the ‘Prepare and Submit Online’ under the ‘Submission Mode’. Read the Instructions carefully and fill in all the form fields.
  • Choose the appropriate Verification option in the ‘Taxes Paid and Verification’ tab.


11

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.


12

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.


13

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:

  • When a policyholder (under 60) applies a policy for themselves, their spouse, and their children, the deduction cap is set at ₹25,000.
  • The maximum limit is raised to ₹50,000 when the policyholder is over 60 and has chosen only self, spouse, and children.
  • When a policyholder under 60 decides to add parents’ health insurance to that of self, spouse, and children, the maximum limit is ₹50,000 if both parents are also under 60.
  • The cap is increased to ₹1,00,000 if policyholders and parents are above 60 years of age, with a component of ₹50,000 set aside for parents.

- A Consumer Education Initiative series by Kotak Life

Amit Raje
Written By :
Amit Raje

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.

Amit Raje
Reviewed By :
Prasad Pimple

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

Kotak Guaranteed Fortune Builder

Download Brochure

Pay 10,000/month for 10 years, Get 1,65,805/Year* for next 15 years.

  • Guaranteed@ Income Benefit for upto 25 years
  • Flexibility to choose income period
  • Premium break for females on child birth or any listed specific illnesses
  • Life cover for the premium payment period
  • Enhance your life cover with rider offerings

ARN. No. KLI/23-24/E-BB/1201

T&C

Download Brochure

Features

  • Increasing Life Cover*
  • Guaranteed^ Maturity Benefits
  • Enhanced Protection Through Riders
  • Tax Benefits
  • Dual Benefits: Guaranteed^Maturity + Death benefits

Ref. No. KLI/22-23/E-BB/999

T&C

- A Consumer Education Initiative series by Kotak Life

Kotak Guaranteed Fortune Builder Kotak Guaranteed Fortune Builder

Kotak Guaranteed Fortune Builder

Guaranteed Income for bright financial future

Invest Now
Kotak Assured Savings Plan Kotak Assured Savings Plan

Kotak Assured Savings Plan

Guaranteed Lumpsum returns for achieving life goals

Invest Now
Kotak Guaranteed Savings Plan Kotak Guaranteed Savings Plan

Kotak Guaranteed Savings Plan

Achieve your long-term goals and get life cover

Invest Now