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A medical emergency for any family member can cause serious financial and emotional distress. Moreover, with the change in lifestyle and unhealthy practices, various diseases are hovering among people of different age groups in India. And with the increase in medical and hospitalisation costs, managing such expenses can become arduous if you have not done sufficient financial planning.
Purchasing a health insurance plan with adequate cover will prove beneficial in a medical emergency. In addition, it will ensure a cashless claim benefit in the network of hospitals provided by your health insurance provider. You can also take the treatment in a hospital of your choice and reimburse the cost later based on the terms and conditions entitled in your health and medical insurance plan.
While you can ascertain such financial benefits in case of medical requirements, you can also save on tax for purchasing the health insurance plan. So, what is 80D in income tax?
Section 80D provides a tax deduction benefit for expenses related to health insurance premiums, preventive medical checkups and other medical expenditures based on the terms and conditions. Let us get started and discuss deduction under 80D.
Our experts are happy to help you!
According to Section 80D deduction, you can claim a deduction for the total health insurance premium paid during any given financial year from the total income. The deduction applies for premium paid or expenses incurred towards self, spouse, dependent children, and parents.
Table of Content
Section 80D of the Income Tax Act allows a deduction benefit for individual and HUF taxpayers only. It is not applicable for domestic companies or limited liability partnership firms.
Individual and HUF taxpayers can claim the deduction benefit for themselves and their family members, such as:
The individual taxpayers or the HUF can claim the deduction under Section 80D income tax for the following types of payments:
Health insurance or medical insurance premium that has been paid for self, spouse, dependent children, as well as parents. The payment should have been made in any other mode other than cash.
Expenses incurred towards preventive health checkups.
Expenditure incurred towards the treatment for the health of a senior citizen who is not covered under any medical insurance plan. 80D medical expenditure benefit is a financial advantage during an emergency and extreme financial distress.
Donations made to the Central Government Health Scheme (CGHS) or any other plan introduced by the Government.
Under Section 80D, individual taxpayers can claim a maximum of ₹25,000. And, if the taxpayer is a senior citizen above 60 years, they can claim a maximum of ₹50,000. Here is a detail for quick reference.
Persons covered based on age |
Section 80D Deduction limit |
Self, spouse, dependent children less than 60 years of age. |
₹25,000 |
Self, spouse, dependent children greater than 60 years of age |
₹50,000 |
Example 1
Mr Rinoy, 52 years old, has purchased a health insurance policy for himself with a premium of ₹35,000. What will be the maximum deduction under 80D?
As Mr Rinoy is less than 60 years of age and not a senior citizen, the maximum deduction limit is ₹25,000.
Hindu Undivided Family (HUF)
A HUF can avail of a tax deduction benefit for the premium paid for the members of the HUF under Section 80D. The deduction will have a maximum limit of ₹25,000 if the person insured is less than 60 years and ₹50,000 if they are senior citizens above 60 years of age.
Deduction under Section 80D for Health Insurance Premium Paid for Parents
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.
Here is a detail for your quick reference.
Persons covered based on age |
Section 80D Deduction limit(₹) |
Tax deduction under Section 80D((₹) |
|
Self, dependent children and spouse |
Parents |
||
Self, family and parents less than 60 years of age |
25,000 |
25,000 |
50,000 |
Self, family and parents are senior citizens |
50,000 |
50,000 |
1,00,000 |
Self as well as a family less than 60 years of age and parents are senior citizens |
25,000 |
50,000 |
75,000 |
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.
Deduction on Preventive Healthcare Check-ups Under Section 80D Income Tax
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.
Deduction under Section 80D for Super Senior Citizens
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.
No Tax Benefits on Cash Payment
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.
Exclusions Under Section 80D Of The Income Tax Act
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:
Do the tax benefits apply to more than one health insurance policy?
Yes, the tax benefits apply to more than one health insurance policy. However, the total deduction limit remains the same considering the multiple policies and not separate for individual policies.
What documents are required for the deduction relating to preventive health checkups under Section 80D?
For filing income tax returns, no specific documents concerning the preventive health checkup are required as proof of reference. However, in case of disagreements, you might have to produce the documents to the relevant officials. Therefore, retaining it all is important for future references.
What is the difference between Section 80D and Section 80C?
Section 80D provides a tax deduction for the premiums paid towards health insurance policies for self, family, and parents, medical expenditures for senior citizens in case the persons are not covered under any health insurance plans, preventive health checkups, etc. On the other hand, Section 80C provides a deduction on the total income for investments made in certain financial instruments such as life insurance, Equity Linked Savings Scheme, etc.
What is the maximum 80D limit in AY 2022-23?
Individuals can claim a deduction for the health insurance of upto ₹25,000 for themselves or family. 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.
Can we claim deductions for health insurance premiums paid on behalf of my working children?
No, premiums paid on behalf of working children do not qualify for a tax deduction under Section 80D.
Do the tax benefits under Section 80D get applicable if my parents and spouse are not dependent?
Yes, the tax benefits apply even if your parents and spouse are not dependent on you.
Can we claim 80D deduction and 80DD deduction together?
Section 80DD of the Income Tax Act, 1961 provides a tax deduction benefit for individual taxpayers who spend funds towards the treatment, rehabilitation or training of a disabled person dependent. The dependent can be parents, children, spouses, sisters and brothers. Claiming tax benefits under Section 80D and Section 80DD together for same dependent person is not applicable.
If I receive medical treatment outside the country, can I avail of tax deduction benefits for my overseas health insurance under section 80D?
Tax deductions under Section 80D for medical treatments received outside India under the overseas health insurance plan will be allowed. However, it is applicable only if your insurance provider is registered under the Insurance Regulatory and Development Authority of India.
Can I claim deductions for their medical insurance premiums if my parents are not dependent on me?
Yes, you can avail deductions for premiums paid towards health insurance plans for your parents even if they are not dependent on you.
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