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

The Government of India incentivises health coverage by offering tax benefits on health insurance premiums, encouraging individuals to avoid out-of-pocket expenses. These tax benefits are available as per the provision of Section 80D of the Income Tax Act, 1961.

According to Section 80D, a deduction is available on the total amount you pay as insurance premiums for critical health plans or top-up health insurance. You can claim the tax benefit on a health plan you buy to cover:

Yourself
Your spouse
Dependant parents
Children

Deductions Under Section 80D

Now that you are familiar with the Section 80D income tax provisions, here is a brief overview of the inclusions.

The deduction applies to both individual and family floater plans. Even when you invest in a Central Government Health Scheme or Mediclaim, Section 80D deductions are applicable.

One essential benefit for senior citizens is that even if they are not paying any premium, a Section 80D deduction is available for their medical expenses.

Here is a simple breakdown of the limits in a tabular format:

Details of the Insured	Premium Amount		Section 80D Exemption
Details of the Insured	Self and children	Parents	Section 80D Exemption
HUF members and NRIs	₹25,000	₹25,000	₹25,000
Individual, family, and parents above 60 years	₹50,000	₹50,000	₹1,00,000
Individual and family under 60 years but parents above 60 years	₹25,000	₹50,000	₹75,000
Individuals and parents under 60 years	₹25,000	₹25,000	₹50,000

Disclaimer: The limits are subject to change as per the latest amendments.

Applicability of Section 80D

Now that you know the Section 80D limit, be aware of a few eligibility terms to get this deduction. The 80D income tax deduction is applicable for all individuals, including NRIs and members of a HUF, who pay medical insurance premiums.

Senior citizens' medical expenses qualify for the Section 80D exemption, exclusive to individual taxpayers. Businesses or firms cannot avail of Section 80D tax benefits.

To understand the deduction limit better, consider this scenario:

Your age is 40 years
Your father is 70 years old
You pay a premium of ₹40,000 for yourself
You pay a premium of ₹45,000 for your father

Here:

You can claim an exemption up to ₹25,000 for yourself
You can also claim up to ₹50,000 for your father’s health insurance premium

To sum up, you can get a deduction of ₹75,000 out of the ₹85,000 you pay in premiums.

If you're also above 60 years, you can claim the full ₹85,000 deduction since the maximum limit is ₹1 Lakh. However, if your father was under 60, you would only be able to claim a deduction of ₹50,000.

Tax Benefits as Per Section 80D

Here’s an overview of the tax benefit available under Section 80D:

Both you and your parents can partially pay premiums for eligibility
Sibling's health cover premiums are not eligible for tax benefits
Deduction excludes service tax or cess from the payable premium amount
Premiums must be paid using non-cash modes to qualify for deduction
Cash payments for preventive health checkups are exempt from this requirement

Exclusions of Section 80D

While knowing inclusions is essential, you also need to be well aware of exclusions to enjoy Section 80D tax benefits:

Default in premium payments during a financial year
Premium paid by the employer for group health insurance
Premium paid for employed or working children
Premium paid for siblings or other relatives such as uncles, aunts, and grandparents
Premium paid in cash

Deduction under Section 80D of Income Tax Act

Are HUFs eligible for tax exemption as per Section 80D?

Yes, HUFs are eligible. However, they can claim only up to ₹25,000 during a financial year.

Can I avail tax benefits for group health insurance coverage?

No, as per Section 80D, you cannot claim tax exemption on premiums paid for group plans. However, if you have an individual or family floater plan, you can avail tax benefits.

Am I eligible for tax benefits on premiums paid for multiple health plans?

Yes, you can avail tax benefits on more than one healthcare plan up to the applicable Section 80D limit.

Considering me and my working father are doing part-payments of premiums, can I still avail tax benefits?

Yes, you and your father are eligible for tax exemptions as per Section 80D.

What is Section 80D exemption?

Section 80D of the Income Tax Act, 1961, allows a deduction for the health insurance premium paid for yourself, your spouse, dependant parents, and children. The maximum deduction permissible will depend on the age of the insured, payment mode, and a few other factors.

Can we claim 80D tax benefits without bills?

There are no stipulations for documentation to claim the Section 80D deduction. However, it is advisable to keep your insurance premium receipts and medical expense bill (for super senior citizens).

Can I claim both sections 80C and 80D benefits?

Yes. You're eligible to claim deductions under both Section 80D for medical insurance payments and Section 80C for investments.

What is the 80D maximum limit?

The Section 80D deduction limit ranges from ₹25,000 to ₹1 Lakh. The available amount depends on the age of the insured and whether you are a HUF member, individual, or NRI.

What is Section 80DD of the Income Tax Act?

Section 80DD of the Income Tax Act provides deductions for expenses on medical treatment, training, and rehabilitation of disabled dependents.

What are the benefits of claiming Section 80DD

Section 80DD provides deductions for medical treatment, training, and rehabilitation of disabled dependents. You can claim ₹75,000 for disabled dependents and ₹1.25 lakh for severe disabilities. This benefit is available to individuals and Hindu Undivided Families (HUFs).

Is proof required for claiming Section 80DD?

Yes, proof is required for Section 80DD. You must provide a medical certificate in Form 10-IA to certify the dependent's disability and submit a self-declaration of expenses for treatment and care.