More about Section 80D (Medical Insurance)

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tax deductions under Section 80C to 80U

Medical insurance is a must for everyone today and the government has provided tax deductions under Section 80D to encourage citizens to invest in medical insurance. The government has provided many tax deductions under Section 80C to 80U in the Income Tax Act, 1961.

All individuals and HUF can claim a tax deduction under Section 80D for investment in medical insurance from their total income in that particular financial year. This deduction can be availed by investing in a health plan for yourself, your spouse and your dependent children. These deductions are available above and over the deductions provided under Section 80C/CCC/CCD.

Deductions for Individuals

An individual can avail tax deductions for medical insurance for themselves, their spouse and any dependent children. An additional deduction can be availed for insurance for parents over the age of 60 years. The table below describes the tax deduction available for individuals in different scenarios.

Scenario

Premium Paid

Total Deduction under Section 80D

Self, Spouse, Children

Parents

Individual and parents below 60 years

25,000

25,000

50,000

Individual and family below 60 years but parents above 60 years

25,000

50,000

75,000

Both individual, family and parents above 60 years

50,000

50,000

1,00,000

Members of HUF

25,000

25,000

50,000

Non-resident individual

25,000

25,000

50,000

Deductions for HUF

An HUF can claim a tax deduction under Section 80D for investment in medical insurance for any of the HUF members. If the insured member is less than 60 years, the deduction will be of Rs 25,000 and will be Rs 50,000 if the insured member is 60 years of age or more.

Preventive Health Check-Up

Payments made by a taxpayer towards a preventive health check-up will make them eligible for a deduction up to Rs 5,000, which is within the overall limit of Rs 25,000 / Rs 50,000 whichever case may be. This deduction can also be claimed either by the individual for himself, spouse, dependent children or parents.

Single Premium Health Insurance Policies

A new provision for claiming a deduction with regards to single premium health insurance policies was introduced in Budget 2018. As per this, a taxpayer who has made a lumpsum premium payment in a single year for a policy valid for more than one year can claim a deduction equal to the appropriate fraction of the amount, under Section 80D. This appropriate fraction is decided by dividing the lump sum premium paid, by the number of years of the policy. However, this would again be subject to the limits of Rs 25,000 of Rs 50,000 whichever case may be.

Key Points to Remember

  • Contribution towards health insurance plan has to made to a scheme as specified by the Central Government or approved by IRDA
  • Payment can be made in any mode but cash
  • Premium paid for any other relative cannot be claimed
  • Premium paid on behalf of working children cannot be claimed
  • In the case of partial payments by you and a parent, both of you can claim a deduction to the extent paid by each
  • Group Health Insurance premium provided by the company is not eligible for deduction

Get assistance in availing all possible tax deductions while filing your income tax return with All India ITR. Download our mobile app from here.

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