Section 80D Of Income Tax Act: Deductions, Eligibility And Things To Remember

Income Tax

A recent report states that almost 30% of India’s population do not have any health insurance. Besides lack of awareness, one of the key reasons behind this remains the reluctance to spend on high insurance premiums. However, keeping the rising treatment costs in mind, especially at private hospitals and clinics, the Government encourages every citizen to purchase a medical insurance policy. 

As per the Income Tax Act, 1961, one can avail 80D deductions on the medical insurance premium paid, which reduces the overall tax payable amount. To reap the benefits, learn crucial details about Section 80D of income tax act, including eligibility, claim process, and more!

Also Read – How To File ITR Online?

Section 80D Deductions

The Section 80D deductions of the IT Act are linked with medical insurance policies. Following are the deductions available:

Individual and family

If you have to bear insurance premium costs for yourself, your children and your spouse, you will be able to claim a tax deduction of Rs. 25,000 per annum. Similarly, if you are paying the insurance premium for your parents (less than 60 years of age), an additional or separate tax deduction of Rs. 25,000 will be available to you. 

In case both your parents or either of them is aged above 60 years, the maximum tax rebate increases up to Rs. 50,000 per annum. 

HUF

Section 80D deduction is also available for the members of Hindu Undivided Families on the mediclaim taken for any of them. Here too, members aged less than 60 years will be eligible for tax benefits of up to Rs. 25,000. It goes up to Rs. 50,000 when the insured is above 60 years of age.

Who is Eligible for Tax Benefits under Section 80D of Income tax act?

Whether it is an individual or a HUF, section 80D deductions will be available only for the following:

• Self
• Dependent children
• Spouse 
• Parents 

Apart from the above-mentioned entities, the deductions will not be available to anyone else. For instance, a firm or a company cannot claim such tax benefits under this section of the Income Tax Act, 1961. 

Since the discussion is regarding eligibility criteria, let’s understand which payments will be eligible for Section 80D deduction:

• Payment of medical insurance premium for spouse, children, self and parents
• Expenses related to the preventive health check-up
• In case you have made any contribution towards the Central Government Health Scheme (CGHS) or any other scheme that is a part of government initiatives  

Deductions on Preventive Health Care Check-up

Before diving into the deductions available on preventive health care check-ups, you should know what it is all about. The purpose of preventive health check-ups is to detect any kind of illness at an early stage. This way, it becomes easier to eliminate the risk factors associated with it.

Now, under Section 80D of income tax act, you will be eligible for tax deductions if you get such check-ups done every year. A deduction of Rs. 5,000 is available for payments made towards a preventive health check-up for individuals less than 60 years of age. 

Note that in this case too, such deductions can be claimed only for the individual, parents, spouse, and dependent children. 

Also Read – How To Use Online Income Tax Calculator?

Things to Remember While Claiming Deductions under Section 80D 

Here are some essential pointers you must keep in mind when claiming section 80D deduction:

• If the insurance premium is paid for working children, you will not be able to avail tax benefits.
• In case you pay the premium for grandparents, aunts, brothers, etc., the regulations of Section 80D will not allow you to claim tax benefits on that. 
• The service tax and cess portion from the premium amount must not be shown while availing tax deductions.
• If you, as well as your parent, have decided to make part-payment of the insurance premium, both of you will be eligible for tax deductions to the extent paid by each.
• In case a company is paying for a group insurance premium, tax benefits will not be available on that.
• In the case of cash payment, it is not possible to claim tax deductions. You can make the payment through credit/debit card, online transactions, etc., in this regard. 

Final Word

Considering the rising health issues the nation faces every year, it is high time that citizens are aware of the need for medical insurance policies. Even though most individuals hold themselves back because of the hefty amount associated with insurance premiums, the tax benefits available under Section 80D make things get quite convenient. 

Before filing ITR to claim tax benefits under this section, make sure to go through the above-mentioned details to avoid any kind of confusion. 

Frequently Asked Questions 

Before you go…

• Looking for instant 🚀 personal loans 24*7 anywhere, anytime? Get personal loans up to ₹20 lakh starting at 9.9% p.a. Install the Navi app now!!
• Or, maybe you’re looking to buy that house you’ve been eyeing 🏠 and you need a loan of up to ₹5 crore. Install the Navi app now and get instant in-principle approval right away! Interest rates starting at 7.89% p.a.
• How about an affordable health insurance policy👨‍⚕️ starting at a monthly premium of just ₹235? Install the Navi app now and get your policy in under 2 minutes.
• Instead, want to put your savings into action and kick-start your investment journey 💸 But don’t have time to do research. Invest now with Navi Nifty 50 Index Fund, sit back, and earn from the top 50 companies.

Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.

This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.