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Section 80 D of ITA: Deductions for Health Insurance

Updated On Dec 31, 2020

Medical emergencies can arise anywhere and at any time. Therefore, it is always important to be well prepared in advance with health insurance that can safeguard you and your family against any unforeseen healthcare expenses. In order to encourage people to purchase a health insurance policy, the government permits the policyholder to avail tax benefits under section 80 D of the Income Tax Act.

Section 80 D of ITA: Deductions for Health Insurance

Eligibility on Tax Deductions for Health Insurance under Section 80 D

Health insurance that is purchased from the overall income in any financial year by an individual or HUF is eligible to claim tax deduction under section 80D of the Income Tax Act. Tax benefits can be availed by an individual not just by buying a health insurance plan themselves but also from an insurance plan that offers coverage to their family members including spouse, children and/or parents. The good thing is that it is above and over the deductions that are claimed under section 80 C/CC/CCD.

Tax Deductions Available Under Section 80D

Tax deduction can be claimed by an individual for a limit of up to Rs 25,000 for health insurance policy for self, spouse and children. Additionally, tax deduction on health insurance for parents can also be availed to a limit of Rs 25,000 ( less than 60 years in age) and Rs. 50,000, if they are senior citizens( more than 60 years in age). In case, the age of both taxpayer and parents is above 60 years, then the maximum deduction available is Rs 1,00,000 under section 80D. Tax deductions that can be availed by an individual taxpayer under different situations are as follows:

Category Premium paid for self, spouse and children Premium paid for parents Total tax deductions under sec 80D
Members below 60 years in age 25,000 25,000 50,000
Members including self, spouse and children below 60 years but parents above 60 years in age. 25,000 50,000 75,000
All family members above 60 years of age 50,000 50,000 1,00,000
Members of Hindu Undivided Family 25,000 25,000 25,000
NRI individual 25,000 25,000 25,000

For instance, Ashita, who is 35 years in age lives with her mother aged 65 years. She has purchased health insurance for herself and her mother and pays a premium amount of Rs 26,000 and Rs 36,000 respectively. The maximum tax deductions that can be claimed by Ashita is Rs 61,000 as her mother falls in the category of senior citizens, maximum deduction available is up to Rs 50,000.

Tax Deductions for Preventive Health Checkups

A taxpayer is entitled to receive a tax deduction of up to Rs 5,000 (falls in the overall limit of Rs 25,000/Rs 30,000 according to the particular case) for any kind of payment made for preventive health checkups. The eligibility to claim this deduction is for self and family members including spouse, children and parents. Also, cash payments for preventive health checkups are also entitled towards tax deduction.

Points to Remember About Tax Deductions

You should keep the following things in mind regarding tax deductions on health insurance policies:

  • You should make payment of premium towards health insurance through any other mode( such as net banking, credit card, debit card, digital mode etc) except for cash.
  • Payment for premium towards health insurance plans for sister, brother, grandparents, aunts, uncles or any other relation is not eligible for tax deductions.
  • Payment of premium towards health insurance of working children cannot be claimed for tax deductions.
  • Premium for group health insurance offered by the company is not eligible for tax deduction.
  • If payment for premium is done partly by you and partly by parents, then deduction can be claimed to the extent of the amount paid by both.

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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