Section 80D - Deductions for Health and Medical Insurance

The maximum allowable deduction for health insurance premiums paid for parents is ₹25,000 in case they are less than 60 years of age and ₹50,000 in case they are senior citizens greater than 60 years of age. This benefit of 80D for senior citizens is in addition to the deduction allowed for self and family.

The following pointers will help you understand better.

• Individuals can claim a deduction on the medical insurance of upto ₹25,000 for themselves or their families. The family includes the spouse and dependent children. It can extend upto ₹50,000 if you or your family members are senior citizens.
  
  
• In addition, individuals can claim a deduction for the health insurance of upto ₹25,000 for their parents less than 60 years of age and upto ₹50,000 if they are senior citizens.
  
  
• If any other medical expenditure is incurred towards the health of self, family or parents who are senior citizens, the maximum allowable deduction under Section 80D income tax is ₹50,000.
  
  
• If you and your parents are aged above 60 years and covered under health insurance policies, the maximum deduction that you can avail of u/s 80D of the Income Tax is ₹1,00,000. On the other hand, if they are not covered under the health insurance plans, the maximum allowable deduction is ₹50,000, as mentioned above. 
  
  

Here is a detail for your quick reference.

Let us consider an example.

Mr Ramesh, the eldest member of his family, 55 years of age, has purchased a mediclaim plan for his family for a premium of ₹30,000 annually. In addition, he has purchased another health insurance plan for his parents, who are senior citizens 72 years old, for a premium of ₹45,000 annually. What is Mr Ramesh's maximum deduction limit under Section 80D?

As Mr Ramesh is 55 years old and his parents 72 years old, the maximum allowable deduction for himself is ₹25,000 from ₹30,000. And, for his parents, the allowable deduction will be ₹45,000 out of the maximum of ₹50,000. Therefore, the total permissible deduction is ₹70,000.

Let us consider another example.

Mr Rahul,  62 years of age, has purchased a health insurance plan for his family for a premium of ₹45,000. In addition, he has purchased another health insurance plan for his parents, who are senior citizens 75 years old, for a premium of ₹50,000 annually. What is Mr Rahul's maximum deduction limit under Section 80D?

As Mr Ramesh is 62 years old and his parents 75 years old, the maximum allowable deduction for himself is ₹45,000 from ₹50,000. And, for his parents, the allowable deduction will be ₹50,000 out of the maximum of ₹50,000. Therefore, the total permissible deduction is ₹95,000.

Preventive healthcare check-ups can help identify illnesses and reduce the risk factors that can lead to severe illnesses or fatalities later in life. The Government encourages such practices and provides a tax deduction benefit for expenses incurred toward the preventive health checkups during the financial year.

The payment for the health checkup could have been done by cash or any other mode of payment and will be under the stated limit of ₹25,000 for persons less than 60 years of age and ₹50,000 for persons above 60 years of age. Also, the preventive health checkup deduction is applicable for the payments done towards a health checkup for self, dependent children, spouse, or parents. 

Under Section 80D deduction, super senior citizens above 80 years of age qualify for a tax deduction for health insurance premiums or other medical expenditures upto ₹50,000. It is also applicable and inclusive for preventive health checkups every financial year. 

Let us consider an example.

Mr Bala, who is 61 years old, pays an annual health insurance premium of ₹35,000 for himself and his family. He additionally pays an annual health insurance premium of ₹35,000 for his parents, who are super seniors above 80 years of age. What are the applicable tax benefits?

Mr Bala can avail of tax benefits of upto ₹35,000 out of the deduction limit of ₹50,000 for himself and his family, being a senior citizen, and another ₹35,000 out of the ₹50,000 deduction limit applicable for senior citizens. Therefore, the total applicable tax deduction is ₹70,000.

Section 80D deduction tax benefits based on the Income Tax Act, 1961 qualify for the deduction for self, family, and parents only if the mode of payment is other than cash for the consideration of health insurance premiums. On the other hand, the tax deduction benefit of ₹5,000 for preventive health checkups is applicable even if the payment is made through cash. Therefore, to benefit from the tax provisions, it is important to be aware of such terms and conditions.

While Section 80D of the Income Tax Act provides a tax deduction benefit for the amount spent on a health insurance premium or other medical expenditures for individuals not included in a health insurance plan, it is subject to certain terms and conditions. Here are a few exclusions that you need to be aware of while making a claim:

• Non-applicability - The tax deduction benefit under Section 80D income tax is not applicable for health insurance premiums paid for other relatives such as brothers, uncles, sisters, aunts, etc.,
• Mode of payment - Health insurance premiums paid by cash will not be considered for the deduction under Section 80D. It can be made by any other mode such as credit card, debit card, etc. You cannot consider the insurance premium paid for your benefit by your working children for the tax deduction. If the payment is made partially by you and the rest by your parents, you and your parents can avail of the deduction based on the amount paid separately.
• Service Tax - You cannot consider the service tax and the cess portion of the premium paid for the health insurance for the deduction under 80D.
• Group Insurance Plan - If your company provides a group health insurance plan, that premium cannot be accounted for in the tax deduction benefit. However, if you are paying an additional premium to enhance the health cover, that portion of the premium applies to the tax deduction benefit. 

• Insurance cover is available under the product.
  
  
• The products are underwritten by Tata AIA Life Insurance Company Ltd.
  
  
• The plans are not a guaranteed issuance plan and it will be subject to Company’s underwriting and acceptance.
  
  
• For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale.
  
  
• Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.
  
  
• Every effort is made to ensure that all information contained in this document is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.
  
  
• Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you
• L&C/Advt/2022/Jul/1548