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Overview
In order to cover unexpected medical bills, Health Insurance is one of the best solutions. And, to make people understand the importance of Medical Insurance plans and to encourage them to purchase insurance policies, the Government of India has introduced various tax benefits under Section 80D of the Income Tax Act 1961. So, let’s delve into the details of Section 80D deductions for Health Insurance premiums.
What is Section 80D of the Income Tax Act?
A provision in the Income Tax Act 1961, Section 80D allows individuals and HUFs to claim deductions and tax benefits for the amount paid towards Health Insurance premiums and preventive health check-ups in a financial year. It is not only designed to help manage medical bills but also helps you escape high taxes. It promotes people to secure themselves and their families against unforeseen medical costs.
Eligibility for Tax Deductions Under Section 80D
Individuals and HUFs can avail tax deductions under Section 80D for Health Insurance premiums paid for themselves, spouses, children and parents. Please note that other entities, such as firms or companies, cannot avail tax deductions under Section 80D.
Tax Deduction Limit Under Section 80D
If you invest in Medical Insurance plans, then Section 80D provides you with tax benefits. As per this section, an individual can claim a tax deduction of up to Rs. 25,000 for the amount paid towards Health Insurance premiums for himself/herself, spouse and dependent children. In case the parents are covered in the policy, an additional deduction of up to Rs. 25,000 is allowed, while for senior citizens, the deduction limit is Rs. 50,000.
What Deductions are Allowed Under Section 80D?
Though the Budget 2024 announced no change in income tax slabs, Section 80D deductions are still available to taxpayers under the new tax regime. Below is the list of deductions allowed under Section 80D.
| Covered Category | Premiums Paid (in Rs.) | Maximum Tax Deduction (in Rs.) | |
| For Self, Spouse and Children | For Parents | ||
| Individuals and parents below the age of 60 | 25,000 | 25,000 | 50,000 |
| Individuals below the age of 60 and parents above 60 | 25,000 | 50,000 | 75,000 |
| Individuals and parents above the age of 60 | 50,000 | 50,000 | 1,00,000 |
| HUFs below 60 | 25,000 | 25,000 | 25,000 |
| HUFs above the age of 60 | 25,000 | 50,000 | 50,000 |
Section 80D Deduction for Medical Costs of Senior Citizens
Though senior citizens need more medical care and have higher healthcare expenses, additional tax benefits are provided. Under Section 80D, if a person is a senior citizen (60 years or above), then the maximum deduction limit for the Health Insurance premiums paid is Rs. 50,000. This helps them manage medical costs efficiently.
What is a Preventive Health Check-up Under Section 80D?
You can also claim deductions for expenses of preventive health check-ups under Section 80D. It helps you maintain good health. The purpose of health check-ups is to identify possible health problems at an early stage.
An individual can claim a tax deduction of Rs. 5000 for preventive health check-ups for himself/herself and family members. Preventive health check-ups include regular medical tests and screening to detect any health issues before they become more serious. Also, make sure to recollect the proof of health check-ups, like receipts, while claiming tax deductions under Section 80D.
Points to Remember While Availing Tax Benefits for Health Insurance
Below are some important points that you must remember while availing tax benefits under Section 80D.
- The amount paid towards the Health Insurance premiums must be the name of the taxpayer. If it’s paid in someone’s name, then the deductions can not be claimed.
- The Section 80D deductions allow you to cover any type of health-related costs, such as preventive check-ups and hospitalisation.
- It is mandatory to recall the proof of premium payments, as it might be required during the Income Tax assessment procedure.
- You can also claim a tax deduction under Section 80D for the Health Insurance premium paid for critical illness.
The Bottom Line
We hope that you have got clarity on the tax benefits of Section 80D and the deductions allowed under this section. Therefore, when you purchase a Health Insurance policy, make sure you enquire about the tax benefits of the policy under Section 80D. Additionally, you must keep yourself updated about the changing tax regimes.
So, check out ACKO’s Health Insurance policies and take benefits of such deductions.
Great Article. The only thing is we cannot avail 80D deduction under the new tax regime.
The explanation on 80D is good. However, it is still not clear if senior citizens without health insurance can claim upto 50K under 80D in new tax regime. This is possible in old tax regime. Your explanation only talks about 80D deduction if health insurance is taken