Section 80D of the Income Tax Act, 1961, offers health insurance policyholders tax benefits to reduce yearly income tax liabilities. This provision is applicable to the premium amount paid by the policyholders towards their health insurance policies for themselves and their family members.
As per Sec 80D of the Income Tax Act, taxpayers can claim tax deductions on health insurance premiums. Benefits under Section 80D are applicable even after claiming exemptions under Section 80C.
Simply put, the health insurance premium that individuals pay for themselves or their family members is subtracted from their taxable income. This, in turn, reduces their tax liability.
Note: Section 80C offers tax exemption of up to Rs. 1.5 lakh from total taxable income. It is applicable to various investments like life insurance, 5-year FD, tuition fees paid towards the education of 2 children, etc.
Considering three different scenarios, Section 80D deductions are as follows:
As per Section 80D, individual taxpayers are eligible for this tax benefits on health insurance. They can pay health insurance premiums for themselves and the following family members to claim deductions:
Premium Paid for Self, Family & Children (Rs.) | Premium Paid for Parents (Rs.) | Section 80C Deduction (Rs.) | |
HUF members | 25,000 | 25,000 | 25,000 |
Individuals and parents below 60 years of age | 25,000 | 25,000 | 50,000 |
Individual & family below 60 years, but parents above 60 years | 25,000 | 50,000 | 75,000 |
Individual, family and parents above 60 years | 50,000 | 50,000 | 1,00,000 |
NRI | 25,000 | 25,000 | 25,000 |
Let’s understand the concept of Tax deduction with the help of this example:
Suppose Ravi, who is above 60 years of age, is paying Rs. 30,000 annually as a premium for health insurance on behalf of himself and his family members. Moreover, he pays Rs. 33,000 for his parents’ medical insurance plan separately. Note that both of his parents are above 60 years of age.
According to Sec 80D, Ravi will be able to claim the following exemptions on his taxable income:
Thus, the overall tax deduction amount that he can claim per year is Rs. 58,000.
Individuals often tend to confuse Section 80C with Section 80D of the Income Tax Act. So here are two key distinguishing points between the two.
Section 80C | Section 80D |
This section provides deductions up to Rs. 1.5 lakh per year. | Under this section of the Income Tax Act, individuals can claim deductions of up to Rs. 1,00,000. However, this is subject to different conditions. |
This includes investments in an extensive range of financial instruments, such as small savings schemes, mutual funds, life insurance premiums, and more. | This is specifically meant for deductions in relation to health insurance premiums paid during a year. |
To be able to claim tax deductions under Section 80D, you must remember the following points at the time of buying a health insurance plan:
For taxpayers, opting for health insurance policies can be an excellent way to reduce their tax liability. Also, having health insurance coverage can bail one out financially in case of a medical emergency. That said, individuals must make sure to choose a health insurance provider that offers the best facilities.
Navi provides health insurance policies to individuals in less than two minutes. Furthermore, it offers cashless claims through a network of more than 10,000 hospitals all over India in 20 minutes. Download the Navi app and insure yourself and your loved ones today!
Ans: Yes, individuals will be able to claim tax benefits under Section 80D even if his/her spouse is not dependent. However, they have to pay health insurance premiums on their spouse’s behalf.
Ans: No, individuals will not be able to claim tax deductions on medical insurance premiums if they are paid in cash.
Ans: Individuals have to pay the service tax amount in addition to the health insurance premium amount. They can’t claim this amount as tax deductions.
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.
Public Provident Fund (PPF) – Know PPF Details and Its Benefits
In 1968, the National Savings Institute introduced the PPF scheme. The Public Provident Fund (PPF) ... Read More »How to Withdraw PF Amount? – Step-by-Step Guide
EPF (Employees Provident Fund) is a popular savings scheme for employees in India. The Central Gove... Read More »Previous Year in Income Tax: Exceptions on Taxation
‘Previous Year’ in the Income Tax Act, 1961 is an important concept associated with the payment... Read More »What are Capital Receipts and What are its Types?
The concept of a receipt is easy to understand as it is described as a written record that a paymen... Read More »What is Anti-Dumping Duty (ADD) – Its Working, Examples and Calculation
Anti-dumping duty refers to a tax or other charges levied on a particular imported product. The con... Read More »Loan to Purchase Land – Types, Features, Eligibility and Documents Required
Loans for land purchase or plot loans are secured loans given for purchasing plots of land. Borrowe... Read More »List of 11 Tax-Free Income Sources in India (2023)
There are many sources through which a person can earn his/her income. It can be income from salary... Read More »New GST Rates in India (2023) – Latest Changes in GST Rates
GST or the Goods and Services Tax is one of the most significant tax reforms to be ushered in since... Read More »What is Input Tax Credit (ITC) in GST – Eligibility and Documents Required To Claim ITC
GST is consumption-based taxation levied at all stages in a value chain. Set-off of GST paid in the... Read More »What is Cess on Income Tax: Overview, Types and Calculation
Cess is a tax on taxes imposed by the Central Government or state governments for specific reasons.... Read More »Section 80EEB: Eligibility & Deduction Amount
Electric vehicles are better for the environment and an efficient alternative to fuel-run vehicles.... Read More »What is Section 80GGA: Deductions on Donations Made for Rural Development
Income Tax Act provides several opportunities for taxpayers to claim partial or full deductions. Se... Read More »Top 10 Chit Fund Schemes in India in 2023
Chit funds are one of the most popular return-generating saving schemes in India. It is a financial... Read More »10 Best Gold ETFs to Invest in India in February 2023
Gold ETFs or Gold Exchange Traded Funds are passively managed funds that track the price of physica... Read More »Top 10 Demat Accounts in India [Lowest Brokerage Charges]
A Demat account was created to eliminate the time-consuming and inconvenient procedure of purchasin... Read More »20 Best Index Funds in India to Invest in 2023 (Updated on 31st Jan)
What is an Index Fund? An index fund is a type of mutual fund or exchange-traded fund (ETF) that... Read More »Best Arbitrage Mutual Funds to Invest in India: Returns and Taxation
Arbitrage funds are hybrid mutual fund schemes that aim to make low-risk profits by buying and sell... Read More »Best SIP Mutual Funds To Invest In India (2023) – Its Types And Taxation
A Systematic Investment Plan (SIP) is a convenient way to invest a fixed sum in mutual funds. For i... Read More »10 Best Corporate Bond Funds in India 2023 – With Returns
Corporate bond funds are debt funds that invest at least 80% of the investment corpus in companies ... Read More »10 Best Banks for Savings Account in India (2023)
A savings account keeps your money safe, and lets you earn interest every quarter. There are many b... Read More »All information is subject to specific conditions | © 2023 Navi Technologies Ltd. All rights are reserved.
Start Small. Dream Big.
Start your Investment Journey with just ₹10