What is Section 80D-Deduction for Medical Premium?

What is Section 80D DEDUCTION FOR MEDICAL PREMIUM:
 

• Section 80D of the Income Tax Act provides income tax deductions related to the medical insurance premium paid for you and your family members. You can claim a tax deduction for the health insurance premium paid for yourself, your parents, children, and your spouse.
• Moreover, this section also allows Hindu Undivided Families (HUFs) to claim 80D deductions. If you wish to know how you will benefit from this section, read on to know more about Section 80D deductions and the tax deductions offered.
   

What investment comes under Section 80D?
 

• The premiums you pay on a health insurance policy and the expense spent on preventive health checkups can be claimed as deductions under Section 80D of the Indian Income Tax Act.
• Individuals can also claim deductions against the health insurance premium paid for their parents’ policies. The extent of deductions will depend upon the age of the primary policyholder.
• Health-based riders such as critical illness cover available with life insurance plans also come under the purview of Section 80D of Income Tax.
• Deductions as per Section 80D: Medical Expenditure Deduction
• 80D deductions are only connected with medical insurance policies. These deductions are mentioned as follows:
  
  Individual and family
   
• If you pay insurance premiums for yourself, your spouse, and your kids, you can claim a maximum tax deduction of ₹25,000 per annum. In the case of senior citizens, the limit is ₹50,000 a year
• If you pay health insurance premiums for your parents, you can claim a maximum tax benefit of ₹25,000 per year if your parents are less than the age of 60. However, if your parents are senior citizens, you can claim a tax benefit of up to ₹50,000 per year
• Preventive Health Check-up under Section 80D
• In 2013-14, the government implemented a preventative health checkup deduction to encourage citizens to be more health-conscious. The goal of preventative health checkups is to detect any sickness and decrease risk factors early on by seeing a doctor on a regular basis. Payments for preventative health check-ups are deducted at a rate of ₹5,000 under
• Section 80D. This deduction is limited to ₹25,000/₹ 50,000, depending on the situation. Individuals can claim this deduction for themselves, their spouses, their dependent children, or their parents. Also, cash can be used to pay for preventive health screenings.
• Additional 80D deduction
• You are eligible to claim an additional 80D income tax deduction of ₹5,000 for the expenses associated with health check-ups. This includes all expenses for a check-up of the entire family.

What are the exclusions under Section 80D?

• The exclusions under section 80D are as follows:
• If you are making payments on your grandparents’, siblings’, or working children’s behalf, you cannot avail the tax benefits. This is applicable to any other relative not explicitly covered under your policy.
• If you are making the health insurance premium payments through cash, you will not be eligible for health insurance tax benefits. Preventive health benefits can be availed even with cash payments.
• If the company makes a group health insurance premium payment on the employee’s behalf (non-contributory), it won’t be eligible for tax exemption. However, if the taxpayers choose to make extra premium payments to improve the group cover (contributory), they can claim tax benefits on the additional amount they paid.
• You will not be liable to receive any tax benefits on GST and Cess charges levied on premium payments.
   

Example:

SUMIT is 35 years old, and his father is 75 years old. SUMIT has taken out medical insurance for himself and his father, paying ₹30,000 and ₹35,000 in premiums, respectively. What is the maximum deduction he can claim under Section 80D?

SUMIT is eligible for reimbursement of ₹25,000 for the premium he paid on his coverage. SUMIT can claim ₹50,000 from his father’s senior citizen insurance policy. The deductions, in this case, are ₹25,000 and ₹35,000. As a result, he can claim a total deduction of ₹60,000 for the year. 

Who is eligible for tax deductions under Section 80D?
 

• You are eligible to claim a tax deduction under Section 80D for yourself, your spouse, your kids, and your parents. In addition, as mentioned above even HUFs are eligible to claim a deduction in this section. Any member of a HUF can claim a tax deduction on the amount paid towards the health insurance premium. This deduction is subject to the upper limit according to Section 80D of the Income Tax Act.
• Who is eligible for a tax deduction under Section 80D of the Income Tax Act,1961?
• Individuals and HUF (Hindu Undivided Family) can file for a tax claim deduction from taxable income under Section 80D.
• You will be eligible for a tax deduction under Section 80D if you make premium payments towards a health insurance policy bought for you, your spouse, children or parents.
• If you are making the payments for the treatment or medical check-ups of your parents above the age of 60, you will be eligible for tax exemption. But, for these cases, you will need to make sure that your parents do not have a separate health insurance policy of their own.
• All deductions are subject to the prevailing guidelines under Section 80D.

Section 80D Limit
 

• For self and family - INR 25,000 tax deduction + INR 5,000 health check-up, which sums up to INR 30,000
• For self, family, and parents INR 50,000 tax deduction + INR 5,000 health check-up exemption, which sums up to INR 55,000
• For self, family, and senior citizen parents - INR 50,000 tax deduction + INR 5,000 health check-up exemption, which takes the total tax deduction to INR 15000
• For self (senior citizen), family, and senior citizen parents - INR 1 lakh tax deduction + INR 5,000 health check-up exemption, which increases the deduction amount to INR 1.05 lakh

Deduction on Section 80D in Income Tax Act, 1961
 

A deduction in respect of medical insurance premium is allowed up to ₹25,000 per budgetary year for medical insurance premium instalments. The policy can be either for you, your spouse or your children. If you or your spouse is a senior citizen (60 years of age or above), then the deduction limit will go up to ₹50,000. If you make premium payments in cash, you will not be liable for tax exemptions.