According to the Income Tax Act of India, section 80D provides tax exemption benefitting the purchasers of health insurance policies either in individual or Hindu Undivided Families (HUF). The provision makes it easier for taxpayers to protect themselves and loved ones from sudden, costly medical emergencies while at the same time seeking a way to pay less in terms of taxes. This article explains the section in further detail, covering things that any taxpayer needs to know, including the allowable deductions and eligibility conditions.
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Following are the modes of payments eligible for deduction under Section 80D as outlined by the Income Tax Department.
Payments made through online methods are allowed.
Preventive health checkup: Cash or online payments are allowed up to ₹5000 for claiming a tax refund under the old tax regime.
Healthcare expenses: Senior citizens that do not have a medical insurance plan, can claim a tax deduction of ₹50,000 for treatment costs in the corresponding financial year.
Health schemes: If a tax payer contributes to the Central Government Health Scheme (CGHS) then a contribution of ₹25,000 can be claimed under the old tax regime.
For example: Nina, a mother of two children, paid ₹21,000 against her Family-floater medical insurance plan in 2024. The plan covered her, her spouse, and two children. She also underwent a preventive health check of ₹5000.
While filing for a tax refund, Nina can claim a full refund of ₹25,000. Here the ₹21,000 health insurance premium and ₹4000 for preventive health check-up will be considered. Nina cannot claim the remaining ₹1000 as that would exceed the max 80D deduction limit of ₹25,000. Note that the cost of preventive health check-up is included in the total limit.
Multi-year health plans are policies that have a tenure of more than one year. Taxpayers can claim tax deductions on these plans too under the old tax regime. Here is how tax deductions on multi-year plans work.
Section 80D offers tax deduction of up to Rs. 5000 for preventive health check-up. This section helps people focus on staying healthy. It does so by allowing them to deduct the costs of health check-ups from their income tax. With this, the Income Tax Act showcases the value of such healthcare measures with preventive health checkup 80d.
What do these check-ups involve? Regular medical exams and tests. The aim is to spot potential health problems early on. This early detection can help tackle health issues swiftly. More than that - the real goal is to prevent illness from starting in the first place. In this way, these check-ups promote complete health and well-being.
| Category | Eligibility | Maximum Deduction |
| Individuals and Families | Self, Spouse, and Dependent Children | ₹25,000 |
| Parents (Below 60 Years) | Additional ₹25,000 | |
| Senior Citizen Parents (60 Years and Above) | Additional ₹50,000 | |
| Hindu Undivided Families (HUFs) | Members of the HUF, including the head, spouse, dependent children, and parents | As per the eligible members in the HUF |
Suppose Jay is an Indian taxpayer who has bought separate medical plans for him and his mother. Jay’s age is 35 years and mother’s age is 65 years. The cost of health insurance is ₹20,000 for Jay and ₹55,000 for his mother. They both underwent preventive health check-ups. This is how the tax deduction will be calculated.
| Insured | Premium paid | Preventive health check-up | Max limit |
| Jay | ₹20,000 | ₹5000 | ₹25,000 |
| Mother | ₹55,000 | ₹5000 | ₹50,000 |
Mode of payment for health insurance premiums and preventive health care is very important when claiming income tax deductions. Here is an overview of which payment modes are allowed.
| Payment for | Allowed payment mode |
| Health insurance premiums | Online payments including credit cards, debit cards, UPI, NEFT, etc., other than cash are allowed |
| Preventive health check-ups | Online and cash payments, both are allowed. |
Let’s take a look at which types of health insurance plans offer tax deductions under 80D Section.
| Type of plan | Available deduction under Sec 80D |
| Individual Health Insurance | It offers health insurance coverage to the policyholder. This plan offers tax deduction under section 80d up to Rs. 25000. |
| Family floater health insurance | It offers health insurance to self dependent children, spouse, and parents. You can get up to Rs. 100000 depending upon the age of all insured members. |
| Senior Citizen Health Insurance | This medical insurance plan provides coverage to senior citizens. The tax deduction allowed is up to Rs. 100000 depending upon the age of the insured senior citizens. |
| Group Health Insurance Plans | Tax deduction under section 80d is usually offered as an employee benefit. The premium paid is eligible only if the policyholder is paying the premium out of pocket. These are not eligible for tax deductions if the employer is bearing the cost of a Group Health Insurance Plan. |
According to Section 80D of the Income Tax Act, the Hindu Undivided Families (HUFs) are allowed to deduct the amount of health insurance premium paid for the health of any member of the HUF from the total income. The maximum 80d deduction allowed is ₹ 25,000 for each of the financial year. But if any member of the HUF is a senior citizen, i.e., he or she is of sixty years of age or above, the 80d maximum limit of deduction is ₹50,000.
Further, the 80d deduction is allowed for expenses incurred for preventive health check-ups, which is limited to ₹5,000 in aggregate of all the deductions allowed under this section. This provision assists in lowering the taxable income of the HUF, which is beneficial when it comes to expenses that are incurred towards the health of the members of the HUF.
As per the Income Tax Act 1961, Section 80DD allows the deduction of expenses incurred for medical treatment, training, and rehabilitation of a dependent who is a person with a disability. This section is intended for people who are taking care of disabled dependents and need some financial relief.
| Key Feature | Details |
| Eligibility | Individual or HUF: This deduction can be availed by a resident individual or a Hindu Undivided Family (HUF). |
| Dependent: The dependent should be a spouse, child, or parents of the individual or any member of the HUF who is in the custody of the taxpayer and is unable to support himself. | |
| Extent of Disability | Disability: At least 40% disability as certified by a medical authority. |
| Severe Disability: 80% or more disability. | |
| Quantum of Deduction | Normal Disability: ₹75,000 per year. |
| Severe Disability: ₹1,25,000 per year. | |
| Conditions for Deduction | The deduction is allowed irrespective of the actual amount spent on the treatment, training, and rehabilitation of the dependent. |
| Expenses covered can include medical treatment, nursing, and training or rehabilitation of the dependent. | |
| Certification | A certificate from a medical authority in a prescribed format is required to claim the deduction. |
| If the disability is temporary, the certificate needs to be renewed periodically as specified. |
Section 80DDB of the Income Tax Act provides a deduction for expenses incurred on the medical treatment of specified diseases or ailments for the taxpayer or their dependents. This section is intended to provide financial relief to those dealing with significant medical expenses.
| Key Feature | Details |
| Eligibility | Resident Individual or HUF: The deduction can be claimed by a resident individual or a Hindu Undivided Family (HUF). |
| Dependents: Dependents include spouse, children, parents, brothers, and sisters of the individual who are wholly dependent on the taxpayer for support. | |
| Specified Diseases | The diseases or ailments eligible for deduction are specified under Rule 11DD of the Income Tax Rules. These typically include neurological diseases (with at least 40% disability), cancer, full-blown AIDS, chronic renal failure, and haematological disorders such as haemophilia and thalassemia. |
| Quantum of Deduction | For individuals below 60 years: Maximum deduction of ₹40,000. |
| For senior citizens (60 years and above): Maximum deduction of ₹1,00,000. | |
| For super senior citizens (80 years and above): Maximum deduction of ₹1,00,000. | |
| Conditions for Deduction | The expenses must be for the medical treatment of specified diseases or ailments. |
| The deduction is reduced by any amount reimbursed by an insurance company or employer. | |
| Certification | A certificate from a specialist doctor working in a government hospital is required to claim the deduction. |
Section 80D is more than just a discounting tool. It aims to provide quality healthcare for our elders without worrying about funds. It caters to those aged 60 or older, and proves highly beneficial if you're responsible for your parents or elderly kin. It offers tax reliefs of up to Rs. 1 lakh depending upon the age for numerous medical expenses such as hospital stays, and doctor's consultations.
Here's a comparison of Section 80D and Section 80C.
| Aspect | Section 80D | Section 80C |
| Nature of Deduction u/s 80d | Deduction for health insurance premiums and preventive health check-ups. | Deduction for specified investments and expenses. |
| Purpose | Promotes health insurance and preventive healthcare. | Encourages long-term savings and investments. |
| Eligible Expenses | Health insurance premiums and preventive health check-up expenses for self, family, and parents. | Investments in specified instruments like life insurance premiums, EPF, PPF, NSC, ELSS, etc. |
| Maximum Deduction | Up to ₹25,000 (₹50,000 for senior citizens) for self, family, and parents. | Up to ₹1,50,000 for specified investments and expenses combined. |
| Mode of Payment | Premiums should be paid through non-cash modes (cheques, digital transactions). | Investment contributions can be made through various modes, including cash. |
| Flexibility in Investments | Specific to health-related expenses. | A diverse range of investment options. |
| Influence on Taxable Income | Reduces taxable income by the amount of deduction claimed. | Reduces taxable income by the amount invested or spent, up to the maximum limit. |
| Applicability | Applicable to individuals and HUFs. | Applicable to individuals and HUFs. |
You must claim medical insurance tax benefits when you file your Income Tax Returns (ITR) for the said financial year. Follow the steps below to get the health insurance tax benefit 80d.
Note: You can claim tax benefits only if you have paid the premium through net banking, debit or credit card, cheque, or demand draft. Cash payments are not eligible for tax benefits.
Here is a list of documents you might require while claiming your tax deductions.
Section 80D (Health Insurance Premiums)
CA Certification
The proper documentation and certifications can simplify the tax filing process and ensure you maximise your eligible deductions and exemptions.
While Section 80D provides valuable deductions, there are specific exclusions to be aware of:
Cash payments for the premiums are excluded from the deductions allowed by the government.
80D does not apply to other products like life insurance premiums and other non-health policies.
NRIs cannot benefit from section 80D deductions as it is a provision accorded to a resident of India.
Strategic planning of your health insurance purchases and claims can be pivotal in maximising your tax benefits under Section 80D of the Income Tax Act. Here are these effective strategies to optimise these benefits through a financial year.
Start your fiscal year by assessing your health insurance needs. An early purchase ensures you're covered throughout the year and allows you to take full advantage of the tax deductions available from the start of the year. This approach eliminates last-minute rushes and decisions that may not be as financially beneficial.
Families with senior citizen parents can consider buying separate health plans for them and the seniors. This will also help in getting more tax deductions as health insurance premiums for senior citizens are higher.
Since there is a provision for getting a tax deduction against preventive health check-up ensure that you get those done every year. This is beneficial for keeping a track of your health too.
You can claim a tax deduction under section 80D only if you have bought a health plan in the corresponding financial year. Thus, it is necessary that you renew the policy on time and claim a tax benefit.
There are many benefits to buying a multi-year health plan. You can pay once and keep getting tax benefits proportionally. You don't have to renew the plan every year. Lastly, you can beat medical inflation and avoid higher premiums in the coming years.
Section 80D of the Income Tax Act of India provides tax benefits for individuals who pay premiums for health insurance. If you are planning to save for your health insurance, your family, or the medical expenditure of your parents or grandparents, Section 80D offers various ways for income reduction. Here, policyholders can learn the rules and limits to maximise the coverage for health and tax credits.
Here are some common questions about Section 80D
Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet, and is subject to changes. Please go through the applicable policy wordings for updated ACKO-centric content, and before making any insurance-related decisions.
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