Section 80D of Income Tax Act about Deductions for Health & Medical Insurance

The global health crisis has taken a toll on people’s financial health, especially those without medical insurance coverage. Besides the lack of awareness regarding insurance policies, high premiums are another critical reason why people skip buying them.

However, with Section 80D deductions, taxpayers can save significantly on hefty hospital bills.

To make the most of these perks and benefits, you must know the little intricacies of Section 80D deductions for medical insurance. Here is everything you need to know!

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Eligibility Criteria to Claim Tax Deductions Under Section 80D

Even though the claiming process will not require you to submit any proof of documentation, you must know who all will qualify for this:

Self
Dependent Parents
Spouse
Dependent Kids

Which Payments Are Eligible for Deductions Under Section 80D?

You can choose any mode of payment to pay for your medical insurance premium other than cash to claim tax benefits under this section. The perks will be available for the amount paid for the treatment of senior citizens (aged 60 years and above) along with medical expenditure for a preventive health check-up.

Preventive Health Checkup

Here is a side note for you to explain what preventive health check-up is all about. It is nothing but the annual health check-up that health professionals carry out mandatorily to curb a person’s health risk factors.

Section 80D of ITA allows you to claim an additional tax exemption for preventive health care capped with an upper limit of ₹5,000 per financial year in addition to medial insurance premiums for both you and your family members. This limit of preventive health care comes under the basic limit of ₹25,000 or ₹50,000 as the case may be.

Look at the following 80D calculation to understand it better -

Let’s assume you are supposed to pay ₹17,000 for your medical insurance premium in a particular financial year. Plus, you have opted for the preventive health check-up for yourself or your spouse and dependent children. In that case, you will be able to avail tax deduction under Section 80D of an additional amount up to ₹5,000, depending on your expenditure. The assessee can claim a total of ₹22,000 u/s 80D.

Additionally, if you have made certain contributions to any sort of schemes launched by the Government, you will also be able to avail tax benefits under this section.

What is the Maximum Deduction Available Under Section 80D?

Now comes the part where you will get to know the 80D maximum limit and how much you can actually save by opting for this. However, note that it varies in terms of different scenarios.

Here are the different deduction limits according to eligibility -

For the amount paid for your insurance premium (for your spouse, children and yourself), the maximum deduction will be ₹25,000.
Individuals can avail 80D deduction of up to ₹50,000 for dependent parents aged below 60 years. In case the age of your parents is above 60 years, the maximum limit goes up to ₹75,000.
If a taxpayer bearing medical insurance premium is above 60 years of age, he can claim up to ₹1,00,000 deduction.

What Are the Factors Excluded Under Section 80D?

Individuals cannot claim deductions under section 80D if:

He or she has made the health insurance premium payment in cash or any payment of medical expenses done in cash.
He or she has made the payment on behalf of siblings, grandparents, working children, or any other relative.
He or she has group health insurance offered by the company on behalf of the employee.

As you can see, the tax benefits available under Section 80D for senior citizens is quite significant. Therefore, you can avoid being burdened with financial obligations at that age.

The nation is suffering from a financial crisis after spending a considerable amount on treatments. The Section 80D deduction facility is probably the most popular tax-saving instrument at this point. If you plan to file for ITR under this section, make sure to go through the information mentioned above beforehand to avoid any confusion.

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FAQs about Section 80D of the Income Tax Act

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What should be my income range to qualify for 80D tax benefits?

The Income Tax Department mentions no such income criteria. Taxpaying entities, including people belonging to Hindu Undivided Family (HUF), can claim tax exemptions under Section 80D.

Can a person paying the medical insurance premium on behalf of working children avail deductions under Section 80D?

No, Section 80D of Income Tax Act does not provide such facilities.

Will 80D deductions under ITA be available if both you and your parents decide to part pay the medical insurance premium?

Yes, both you and your parents can claim tax exemptions to the extent paid by each limited to the maximum limit applicable.

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How much can I claim under 80D deductions from my total tax?

Under Section 80D, you can deduct the premiums paid for medical insurance for yourself and your dependents from your total taxable income. The deduction limit is ₹25,000 for individuals under 60 years of age and ₹50,000 for senior citizens. You can use an income tax calculator to deduct your total tax liability by this amount.

Section 80D of Income Tax Act about Deductions for Health & Medical Insurance

Eligibility Criteria to Claim Tax Deductions Under Section 80D

Which Payments Are Eligible for Deductions Under Section 80D?

What is the Maximum Deduction Available Under Section 80D?

What Are the Factors Excluded Under Section 80D?

FAQs about Section 80D of the Income Tax Act

What should be my income range to qualify for 80D tax benefits?

Can a person paying the medical insurance premium on behalf of working children avail deductions under Section 80D?

Will 80D deductions under ITA be available if both you and your parents decide to part pay the medical insurance premium?

How much can I claim under 80D deductions from my total tax?

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