Summary: Section 80D of the Income Tax Act allows individuals and Hindu Undivided Families (HUFs) to claim deductions for health insurance premiums. This deduction is available over and above the INR 1.5 lakh limit under Section 80C, but only under the old tax regime. Section 80D covers premiums paid for self, spouse, dependent children, and parents, with varying limits. For individuals and parents below 60 years, the deduction is capped at INR 25,000. For senior citizens, the limit rises to INR 50,000. A preventive health check-up deduction of INR 5,000 is also available, but within the overall limit of INR 25,000 or INR 50,000. Senior citizens without insurance can claim up to INR 50,000 for medical expenses. Payments towards the Central Government Health Scheme are deductible up to INR 25,000 for self and family. For single-premium insurance policies, deductions are spread proportionately over the policy term. The deduction under Section 80D is not available under the new tax regime. This provision is beneficial for maximizing tax savings on health-related expenses.
Provisions of section 80D of the Income Tax Act offers additional deduction towards health insurance premium to individuals and HUFs.
Importantly, deduction u/s. 80D is allowable over and above deduction of INR 1.5 Lakhs u/s. 80C of the Income Tax Act. Further, deduction u/s. 80D is allowable only under old tax regime and the same is not allowed under new tax regime.
The present article covers eligibility for deduction u/s. 80D of the Income Tax Act; quantum of deduction available u/s. 80D; understanding more about preventive health check-up; manner of deduction in case of single premium medical insurance policy and frequently asked questions.
Eligibility for deduction under section 80D of the Income Tax Act –
Deduction under section 80D is eligible to Individuals and Hindu Undivided Family [HUFs] only. In other words, deduction is not available to any other entities i.e. company, firm, LLP, etc.
Notably, individuals and HUFs can claim deduction u/s. 80D for insurance premium paid for self; spouse; dependent children and parents.
Quantum of deduction available under section 80D of the Income Tax Act –
The quantum of deduction available under section 80D is tabulated hereunder –
| Particulars | Deduction u/s. 80D |
| Medical insurance premium |
Maximum amount of allowable deduction is INR 25,000. However, in case any member is senior citizen, maximum allowable deduction is INR 50,000.
Maximum amount of allowable deduction is INR 25,000. However, in case any of the parent is senior citizen, maximum allowable deduction is INR 50,000. |
| Preventive Health Check-up | Maximum allowable deduction is INR 5,000. |
| Deduction of medical cost for senior citizens | Maximum allowable deduction is INR 50,000. Notably, deduction is allowed only when no insurance premium is paid for senior citizens. |
| Contribution to Central Government Health Scheme i.e. CGHS/ notified scheme | Maximum allowable deduction is INR 25,000. However, deduction covers only contribution made for self, spouse and dependent children.
Deduction is not available in case of contribution made for parents. |
Following table summarizes the maximum deduction available under section 80D of the Income Tax Act –
| Different categories | Deductions | Maximum amount deductible under section 80D | ||
| Deduction for self, spouse and dependent children | Deduction for parents | Preventive Health Check-up | ||
| Individuals (below the age of 60 years) | INR 25,000 | – | INR 5,000 | INR 25,000 |
| Individuals (below 60 years) and parents (below 60 years) | INR 25,000 | INR 25,000 | INR 5,000 | INR 50,000 |
| Individuals (below 60 years) and parents (above 60 years) | INR 25,000 | INR 50,000 | INR 5,000 | INR 75,000 |
| Individual (above 60 years) and parents (above 60 years) | INR 50,000 | INR 50,000 | INR 5,000 | INR 1,00,000 |
| HUFs members below 60 years | INR 25,000 | INR 25,000 | _ | INR 25,000 |
| HUFs members above 60 years | INR 50,000 | INR 50,000 | _ | INR 50,000 |
Notably, individuals mentioned in the above tables includes self, spouse and dependent children.
Understanding more about Preventive Health Check-Up –
Deduction u/s. 80D included preventive health check-up from the year 2013-2014. It was introduced to mainly encourage proactive health check-up which enables to identity possible health issue at early stage.
Preventive health check-up of INR 5,000 is available in case of payment for self, spouse, dependent children and parents. However, deduction u/s. 80D towards preventive health check-up is available within overall limit of INR 25,000/ INR 50,000 and not above.
Importantly, deduction towards preventive health check-up is available even if the mode of payment is cash.
Manner of deduction under section 80D in case of Single Premium Medical Insurance Policy –
In case of single premium medical insurance policy, lump sum payment is made instead of regular instalments. Thus, deduction u/s. 80D will be available on proportionate basis –
|
Deduction u/s. 80D =
|
Single Insurance Premium Paid |
| Total number of years for which policy is taken |
Frequently Asked Questions (FAQs) –
Some of the relevant Frequently Asked Questions with regard to deduction u/s. 80D of the Income Tax Act are highlighted hereunder –
1. What are deduction under 80D?
Deduction under 80D of the Income Tax Act is available to individuals and HUFs for payments made towards health insurance premium.
2. Who can claim 80D benefit?
Only individuals and HUFs are eligible to claim 80D benefit. Accordingly, 80D benefit is not available to other entities like firm, company, LLP, etc.
3. Can we claim 80D without bills?
In general, income tax department doesn’t require submission of proof while claiming deduction under section 80D of the Income Tax Act. However, it is always advisable to have bill so that, in case the proof is demanded, the same can be submitted.
4. Is 80D available in the new tax regime?
No, deduction under section 80D of the Income Tax Act is not available in the new tax regime. The deduction is available only in case of old tax regime.
5. How do I save money on 80D?
Money can be saved u/s. 80D by making payment towards medical insurance premium; preventive health check-up; medical cost for senior citizens and contribution to central government health scheme.
6. Can I claim both 80C and 80D?
Deduction u/s. 80D is available over and above deduction u/s. 80C. Accordingly, individuals/ HUFs are allowed to claim deduction under both the sections i.e. 80C and 80D.
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