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Section 80D of Income Tax Act: 80D Deductions Under Medical Insurance, Limit & Eligibility

Unlock Health Insurance Tax Benefits: A Complete Guide to Deductions Under Section 80D

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Home / Health Insurance / Section 80D

Health insurance is not only a crucial tool for managing healthcare costs but also a smart way to obtain tax benefits. In India, Section 80D of the Income Tax Act of 1961 offers significant tax advantages for individuals and families who invest in medical insurance. This article delves into the intricacies of Section 80D, providing insights on how to maximize your tax savings through medical insurance premiums and health check-ups.

What is Section 80D of the Income Tax Act?
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80D is a section in the Income Tax Act dedicated to tax benefits for purchasing health insurance policies and preventive treatment. It allows you to claim deductions on the premiums you pay for health insurance policies, including a deduction of up to ₹25,000 for individuals and ₹50,000 for senior citizens on health insurance premiums, preventive health check-ups, and medical expenses. The idea is to encourage people to secure themselves and their families against unexpected medical expenses.

It is your financial partner designed to help you escape high taxes and an easy method of maintaining good health with money. Unlike intricate tax codes, this section is your one-stop solution, which provides a straightforward approach for securing your insurance premiums.

Tax Deductions Under Section 80D
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The following table lists the tax deductions under Section 80D of the Income Tax Act as of FY 2023-24:

A table explaining Deductions Under Section 80D

Who is eligible for tax deductions under Section 80D?
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Here's a breakdown of eligibility based on the insured individuals.

CategoryInsured IndividualsDeductions Available
Individuals and FamiliesSelfPremiums paid for self's health insurance
SpousePremiums paid for spouse's health insurance
ChildrenPremiums paid for dependent children's health insurance
ParentsBelow 60 YearsPremiums paid for parents below 60 years of age
Senior Citizen Parents (60 Years and Above)The age of parents is important when it comes to claiming higher deductions. Parents above the age of 60 can enjoy more deductions.
Hindu Undivided Families (HUFs)Members of HUF, including the breadwinner, spouse, dependent children, and parentsDeductions for health insurance premiums paid for the HUF members

Types of health insurance plans allowed under Section 80D
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Let's delve into the types of health insurance plans allowed under Section 80D of the Income Tax Act

Individual Health Insurance
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This type of plan covers only one person, usually the policyholder. The premium paid for an individual health insurance policy is eligible for deduction under Section 80D.

Example: Raj has an individual health insurance policy covering only himself. The premium he pays for this policy is eligible for deduction under Section 80D.

Family Floater Health Insurance
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A family floater plan covers the entire family under a single policy. The sum assured can be used by any family member in case of medical emergencies. Premiums paid for family floater policies are eligible for deduction.

Example: Meera has a family floater health insurance policy covering herself, her spouse, and their two children. The premium paid for this policy is eligible for deduction under Section 80D.

Senior Citizen Health Insurance
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These plans are designed specifically for individuals who are senior citizens (60 years or above). Premiums paid for health insurance policies for senior citizens are eligible for higher deductions under Section 80D.

Example: Mr. and Mrs. Sharma have a health insurance policy designed for senior citizens. The premium they pay for this policy is eligible for a higher deduction under Section 80D.

Critical Illness Insurance
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Critical illness plans provide coverage for specific life-threatening diseases. Premiums paid for critical illness insurance are also eligible for deduction under Section 80D.

Example: Ankit has a critical illness health insurance policy that covers major diseases like cancer and heart ailments. The premium he pays for this policy is eligible for  80d deduction for senior citizens.

Preventive Health Check-up Plans
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Some health insurance policies include coverage for preventive health check-ups. Additionally, separate preventive health check-up plans are available. The premiums paid for these plans are eligible for an additional deduction under Section 80D.

Example: Suman purchases a health insurance policy that includes coverage for annual health check-ups. The premium she pays for this policy is eligible for deduction, and she can claim an additional deduction for the preventive health check-up expenses.

Deduction for medical expenses of senior citizens under Section 80D
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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 for nume­rous medical expense­s such as hospital stays, and doctor's consultations.

Let’s take a look at how deductions work under Section 80D.

Individuals and Families
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Example: Rahul, a working professional, pays a health insurance premium covering himself, his wife, and their two dependent children. The total premium amounts to ₹20,000. Rahul can claim a deduction of ₹20,000 under Section 80D, as it falls within the ₹25,000 limit.

80D deduction limit for Parents (Below 60 Years)
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Example: Priya supports her parents, who are both below 60 years of age. She pays a health insurance premium of ₹25,000 for her family, including her parents. Priya can claim a total deduction of ₹25,000 under Section 80D. She can increase the coverage and still get a tax relief as she is well below the allowed 80d deduction limit.

Senior Citizen Parents (60 Years and Above)
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Example: Anil has senior citizen parents, both aged 65. He pays a health insurance premium of ₹30,000 for his family, and ₹30,000 for his parents. Anil can claim a total deduction of ₹55,000 under Section 80D (₹25,000 for self, spouse, and dependent children + ₹30,000 for senior citizen parents).

Tax Exemption vs. Tax Deduction
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Let’s understand the difference between Tax exemption and tax deduction.

FeatureTax ExemptionTax Deduction
DefinitionA portion of income that is not subject to tax.An amount subtracted from total taxable income.
ObjectiveTo encourage specific investments or savings.To reduce taxable income by accounting for certain expenses.
ExampleInterest earned on PPF (Public Provident Fund)Investment in ELSS (Equity Linked Savings Scheme) under Section 80C
How It WorksThe exempted amount is excluded from your total income before calculating tax.The deductible amount is subtracted from your gross income to determine your taxable income.
Benefit TypeDirect reduction in taxable income by excluding certain income sources.Reduction in taxable income based on qualifying expenditures.
Common SectionsSection 10 (like HRA, agricultural income)Sections 80C to 80U (like 80C for investments, 80D for medical insurance)
Impact on Taxable IncomeDecreases the total income considered for tax calculation.Lowers the gross income, thus reducing the taxable income.
EligibilityGenerally applies to specific income sources like allowances or certain investments.Generally applies to specific expenses or investments made during the financial year.

Tax Deduction for Health Insurance Premium paid for Parents under Section 80D
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Section 80D serves as a financial ally, addressing the well-being of those who have cared for us. This deduction is not just a monetary relief; it's a testament to our commitment to ensuring our parents receive the best healthcare without compromising our financial stability.

This provision extends its support to individuals who are caretakers of their parents. It acknowledges the financial responsibilities that come with providing healthcare for our ageing loved ones. The deduction covers a spectrum of medical expenses, embracing everything including essential treatments and routine doctor visits.

What are preventive health check-ups under Section 80D?
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Section 80D offe­rs preventive he­alth check-ups. 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.

Mode of payments eligible for deductions under Section 80D
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Following are the modes of payments eligible for deduction under Section 80D.

The focus on non-cash forms is consistent with the objectives of fostering transparency, minimising the chances of financial abnormalities, and ensuring that monetary transactions are properly documented. On the contrary, cash payments are not considered to be eligible under Section 80D.

If taxpayers adhere to the prescribed non-cash payment methods, they not only secure the right to obtain deductions, but they also contribute to keeping their financial records structured and well-organised. This is in line with the basics of responsible financial control as prescribed in the Income Tax Act.

Deduction under Section 80D for multi-year health insurance premiums paid in lump sum
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Section 80D of the­ Income Tax Act allows for deductions on health insurance­ premiums. All types of premiums, eve­n lump-sum ones for multiple years, are­ included. 

The 80d deduction list is as follows:

BeneficiaryAge CriteriaMaximum Deduction Limit (INR)
Taxpayer, Spouse & ChildrenNot Applicable25,000
Parents (Non-senior citizens)Below 60 yearsAdditional 25,000
Senior Citizen Parents60 years and aboveAdditional 50,000

 

Reme­mber, the total discount, eve­n for multi-year plans paid at once, shouldn't go over the­ set cap. This cap depends on the­ policyholder's age.

Deduction under Section 80DD (treatment of a dependent with disability)
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Income Tax Act's Se­ction 80DD offers a discount in taxes for people paying for the medical care, improve­ment, or upkeep of a de­pendent suffering from a disability. This tax cut applies to individuals and Hindu Undivide­d Families (HUFs). It's designed to aid care­givers of depende­nts with additional needs. Key facts to know are as follows:

Eligibility Criteria
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Dependent with Disability: 

Nature of Disability:

Deduction Limits:

Documentation and Certification:

Points to note
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  1. Dependency Criteria: The dependent should not have claimed a deduction under Section 80U, which pertains to the individual's own disability.

  2. Continuous Treatment: The deduction is available for the continuous treatment of the dependent. It covers various aspects such as medical care, training, and rehabilitation.

  3. No Age Limit for Dependents: Unlike some other sections, there is no age limit for the dependent for whom the expenses are incurred.

Deduction Under Section 80DDB (treatment of specified illnesses)
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Section 80DDB from the­ Income Tax Act gives a tax break for folks who've­ spent money on treating ce­rtain illnesses, for them or pe­ople they care for. The­ idea here is to reduce the weight of de­aling with serious medical costs. Here are the key details:

Taxpayer or Dependent:

Specified Illnesses:

Deduction Limits:

Documentation and Certification:

Points to note:

  1. No Age Limit for Deduction: Unlike some other sections, there is no age limit for the taxpayer or the dependent for whom the expenses are incurred.

  2. Certification Period: The deduction is available for expenses incurred during the previous year. The taxpayer needs to provide evidence of the expenses along with the tax return.

  3. Dependency Criteria: The dependent should not have claimed a deduction under Section 80U, which pertains to the individual's own disability.

Section 80D vs 80C
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Here's a comparison of Section 80D and Section 80C.

AspectSection 80DSection 80C
Nature of Deduction u/s 80dDeduction for health insurance premiums and preventive health check-ups.Deduction for specified investments and expenses.
PurposePromotes health insurance and preventive healthcare.Encourages long-term savings and investments.
Eligible ExpensesHealth 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 DeductionUp 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 PaymentPremiums should be paid through non-cash modes (cheques, digital transactions).Investment contributions can be made through various modes, including cash.
Flexibility in InvestmentsSpecific to health-related expenses.Diverse range of investment options.
Influence on Taxable IncomeReduces taxable income by the amount of deduction claimed.Reduces taxable income by the amount invested or spent, up to the maximum limit.
ApplicabilityApplicable to individuals and HUFs.Applicable to individuals and HUFs.

 

Section 80D and Se­ction 80C aren't the same in tax planning. Se­ction 80D covers health costs, but Section 80C pushe­s people to save and inve­st for the future. Knowing the diffe­rence can help taxpaye­rs make smart choices that fit their financial goals.

How to Claim Tax Benefits on Health Insurance under Section 80D
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You need to claim tax benefits on medical insurance 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.

Documentation and Certification required for tax claims
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Here is a list of documents that you might require while claiming your tax deductions.

 

Tax Deductions

80d exemptions

General Documentation

Certification

  1. Section 80C (Investments and Savings)

    • Life Insurance Premium: Copy of premium payment receipts.

    • Public Provident Fund (PPF): Passbook or account statement.

    • National Savings Certificates (NSC): Certificates or investment proof.

    • Tax-saving Fixed Deposits: Fixed deposit receipts.

    • ELSS (Equity Linked Savings Scheme): Investment statements.

    • Principal Repayment on Home Loan: Loan statement from the bank or financial institution.
       

  2. Section 80D (Health Insurance Premiums)

    • Premium payment receipts for health insurance policies.

    • Copies of health insurance policy documents.
       

  3. Section 80E (Education Loan Interest)

    • Loan statement from the bank or financial institution indicating the interest paid.
       

  4. Section 24(b) (Home Loan Interest)

    • Interest certificate from the bank or financial institution.
       

  5. Section 80G (Donations)

    • Receipts of donations made.

    • Certificates from the charitable organisations.
       

  6. Section 80TTA (Interest on Savings Accounts)

    • Bank statements showing interest earned on savings accounts.

  1. House Rent Allowance (HRA)

    • Rent receipts from the landlord.

    • Rental agreement (if required by the employer).

    • PAN of the landlord (if the rent exceeds Rs. 1 lakh per annum).
       

  2. Leave Travel Allowance (LTA)

    • Travel tickets and invoices.

    • Proof of travel (boarding passes, etc.).
       

  3. Agricultural Income

    • Documents supporting agricultural land ownership.

    • Proof of agricultural income (sales receipts, bills).
       

  4. Interest on PPF

    • PPF passbook or account statement showing interest credited.

  • PAN Card: Permanent Account Number (PAN) card copy for identification.

  • Form 16: Issued by the employer detailing salary and tax deducted.

  • Form 26AS: Annual tax statement from the Income Tax Department.

  • Aadhaar Card: For identity and address proof.

  • Bank Statements: For verification of income and investments.

  1. CA Certification

    • For claiming certain deductions and exemptions, a certificate from a Chartered Accountant (CA) may be required, especially for complex claims like business expenses.
       

  2. Tax Audit Report

    • For individuals and businesses whose turnover exceeds the prescribed limit, a tax audit report certified by a CA is necessary.

Documents required for Filing Process of Income Tax Returns
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  1. Income Tax Return (ITR) Forms

    • Choose the correct ITR form based on your income sources.

    • Attach relevant documents electronically (if filing online) or in physical form (if filing offline).
       

  2. Verification

    • E-verify your ITR using Aadhaar OTP, net banking, or by sending a signed ITR-V to the Centralised Processing Center (CPC) in Bengaluru.

Having the right documentation and certifications can simplify the tax filing process and ensure you maximise your eligible deductions and exemptions.

Things to remember when availing tax deductions under Section 80D of Income Tax Act
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Availing tax deductions under Section 80D can be beneficial for individuals and families investing in health insurance and preventive health check-ups. To make the most of these deductions, here are some important things to remember:

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Health Insurance Premiums
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Ensure that the premiums for health insurance policies covering yourself, your family, and parents are paid through non-cash modes like cheques, digital transactions, or bank drafts. Cash payments may not qualify for deductions.

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Policy Details
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Keep a record of your health insurance policy, including the policy number, coverage details, and premium payment receipts. These documents will be essential while filing your tax returns.

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Dependent Details
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Provide accurate information about the dependents covered under the health insurance policy. This includes spouses, dependent children, and parents. Different deduction limits apply based on the individuals covered and their age.

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Preserve Health Check-up Records
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If you are claiming deductions for preventive health check-ups, retain the bills and receipts for these expenses. These records may be required as supporting documents during tax assessments.

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Age
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Be mindful of the age of your parents. Different deduction limits apply for parents below 60 years and senior citizen parents (60 years and above). Ensure you claim the appropriate deductions based on their age.

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Policy Renewals
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Regularly renew your health insurance policy to maintain continuous coverage. Ensure premiums are paid on time and update the policy details as needed.

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Use Maximum Limits
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 Be aware of the maximum deduction limits under Section 80D. For instance, if you are covering your family and parents, understanding the individual and cumulative limits will help you maximise your tax benefits.

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Check for Updates
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Tax laws may undergo changes. Stay informed about any amendments to Section 80D to ensure compliance with the latest regulations and to take advantage of any new provisions.

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Consult a Tax Professional
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If you have complex financial situations or uncertainties about claiming deductions, seek advice from a tax professional. They can provide personalised guidance based on your specific circumstances.

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Fulfil Documentation Requirements
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Ensure you have all necessary documents, such as health insurance policies, premium payment receipts, and health check-up bills, when filing your tax returns. Proper documentation is crucial during tax assessments.

Frequently Asked Questions (FAQs)
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Here are some common questions about Section 80D

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​​What is the 80D deduction in income tax?

Section 80D allows deductions for medical insurance premiums paid for self, spouse, parents, and dependent children. The deduction limit varies based on the age of the insured and whether they are individuals or part of an HUF.

Is proof required for 80D?

Yes, you need to provide proof, such as receipts of premiums paid or medical bills, to claim deductions under Section 80D.

Does 80D cover parents-in-law?

No, Section 80D does not cover health insurance premiums paid for parents-in-law. It only covers parents, spouse, and children.

What comes under Section 80D?

Section 80D covers premiums paid for health insurance policies and preventive health check-up, for yourself, your family, and your parents. It's a comprehensive way to secure your loved ones' well-being and receive tax benefits.

What is Section 80D exemption?

Section 80D exemption is a tax benefit provided by the Indian government for expenses related to health insurance. It allows you to reduce your taxable income by the amount spent on health insurance premiums, ensuring a healthier financial future.

What is the limit of Section 80 deduction?

The limit for Section 80 deduction varies based on factors like your age and the coverage type. For individuals below 60, the maximum deduction is ₹25,000, while those above 60 can avail up to ₹50,000. Additionally, if you're covering your parents, an extra ₹25,000 to ₹50,000 can be claimed, depending on their age. The deduction for preventive health checkup is included in the overall limit.

Can we claim 80D without bills?

No, you generally need bills or receipts as proof of health insurance premium payments to claim 80D. Keeping these documents handy will help you during the tax-filing process.

How much monthly medical bills can be claimed under 80D?

Section 80D primarily focuses on insurance premiums, so monthly medical bills aren't directly claimable. However, the premiums you pay for health insurance are eligible for deduction.

Can we claim 80D and 80DD together?

Yes, you can claim deductions under both 80D and 80DD, provided you meet the eligibility criteria for each section. They serve different purposes - 80D for health insurance and 80DD for medical expenses on a disabled dependent.

What are the exclusions under section 80D?

Exclusions under Section 80D are any amount paid above the set limit is not allowed, you cannot claim more for parents below the age of 60 years, etc.

What is the maximum amount of deduction under section 80D?

The maximum deduction under Section 80D depends on factors like age and family composition. It's wise to look at the latest tax regulations or speak to a financial advisor for accurate information.

What is covered under section 80C?

Various investments and expenses eligible for tax deductions, such as life insurance premiums, employee provident fund (EPF), public provident fund (PPF), National Savings Certificates (NSC), tuition fees, and principal repayment on home loans are covered under section 80C.

Can I claim both 80C and 80D?

Yes, you can claim deductions under both 80C and 80D, contributing to significant tax savings.

Can I claim 80D for parents without bills?

Ideally, you should have bills or receipts to claim 80D for your parents. It serves as proof of premium payment and ensures a smooth claim process.

Can I claim tax exemptions on my health insurance premiums if I have paid in cash?

It is crucial to pay health insurance premiums through the prescribed methods to avoid queries and delayed returns.

Who can claim a deduction under section 80D and how much?

Individuals, HUFs, and NRIs can claim deductions under Section 80D. The amount varies based on the age of the insured and the type of health insurance coverage.

What medical expenses are covered under section 80D?

Section 80D primarily covers health insurance premiums. It doesn't directly cover medical expenses. However, expenses related to preventive health check-ups are eligible for deduction.

What is a preventive health checkup under section 80D?

A preventive health checkup refers to medical examinations done to detect health issues before they become serious. Expenses related to such check-ups are eligible for deduction under Section 80D.

Can I avail tax exemption for my group health insurance policy?

Yes, premiums paid for group health insurance policies are eligible for tax exemption under Section 80D. Ensure you have the necessary documentation to support your claim.

Can I avail tax benefits for more than one health insurance policy?

Yes, you can claim tax benefits for multiple health insurance policies, covering yourself, family, and parents. Ensure the total claimed amount adheres to the prescribed limits under 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.