Section 80D deduction

Under Section 80D, any individual or Hindu undivided family can claim a tax deduction for health insurance premiums paid for both super top-up health insurance and critical illness health policies. Besides claiming deductions for self, the taxpayer can also enjoy tax benefits from the health insurance premium paid for the other members of the family.

Here are some of the payments for which individuals and HUF can claim tax exemption under Section 80D.

• Premium paid for health insurance via any mode except cash.
• Preventive check-up costs
• Treatment costs incurred due to the medical condition of senior citizens over 60 years who are not covered under any insurance policy.
• If any person wants to contribute to Central Government Health Scheme can claim for deduction.

Listed below are some of the exclusions under Section 80D of the Income Tax Act.

• Premium Payment Mode:

The policyholder is not eligible to claim a tax deduction if the premium for their health insurance policy is paid in cash. In addition to this, an individual who is paying must only pay health insurance premiums to avail of the tax benefits.

• Service Tax:

Taxpayers are not liable to enjoy any tax benefits on the service tax charges assessed on the payment of the premium. Therefore, a policyholder must pay service tax on health insurance premiums, and the payable amount must be equal to 14% of the premium.

• Group Health Plans:

Group Health Insurance Policies are not eligible for tax deductions under Section 80D. However, the individual can claim tax under Section 80D if they have paid an extra premium to upgrade their plan.

Section 80C of the Income Tax Act provides high tax benefits to individuals. Any person can avail of tax deductions up to Rs. 1.5 lakh on various investments, including ULIPs, PPFs, LIC premiums, and more. However, under Section 80D, the health insurance premium paid for oneself, one family, parents, and preventive health check-up expenses are allowed as a tax deduction. A policyholder can claim a tax exemption on their health insurance up to Rs. 1 lakh.