Section 80D Of Income Tax Act: 2022 Guide On Deductions & Claims

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!

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

I will be getting my preventive health check-up done. Can I claim tax deduction if it’s a cash payment?

Yes, although Section 80D of the Income Tax Act, 1961 does not allow individuals to pay via cash and claim deductions for it, for preventive health check-ups, it is available. You can make a cash payment and claim deduction later for that.

How much tax deduction can I claim if for my parents are in their 70s?

The maximum deduction under Section 80D of Income Tax Act, 1961 is Rs. 1,00,0000 for super senior citizens or those above 60 years of age. If your parents are in their 70s, you can claim up to that 80D limit for making a payment for the insurance premium.

Which document should I submit to claim tax deduction under Section 80D for preventive health check-ups?

You need not submit any document when filing ITR to claim tax deduction for preventive health check-ups. However, to be on the safer side, keep the proof of receipt paid for the insurance premium with you.

Are tax deductions under Section 80D applicable on single-premium health insurance policies?

Yes, you can claim tax deduction for a single-premium health insurance policy. The provision got introduced in Budget 2018, where it was stated that individuals making a lump sum health insurance premium payment for himself/herself can claim tax deductions under Section 80D. However, the policy must be valid for more than a year.

Can I avail tax benefits under Section 80D for medical treatment received outside India?

Yes, it is possible to claim tax deductions under Section 80D of ITA if you receive medical treatment outside the country. In that case, you will have to use your overseas health insurance plan. Note that your insurance provider must be registered with IRDAI or the Insurance Regulatory and Development Authority of India.

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