A To Z About Section 80D Deduction Benefits On Medical Insurance

Health insurance is one of the ideal investments you can make to cover your medical costs. If you are concerned about paying the minute cost of your health insurance premium, consider how you will pay for costly medical treatments if you are hospitalised. The government offers tax breaks on health insurance plans under Section 80D of the Income Tax Act to encourage people to add medical coverage to their insurance portfolio.

Deduction under section 80D for parents’ health insurance premiums –

Every fiscal year, the medical insurance premium paid for parents is also eligible for the Section 80D deduction of up to Rs 25,000. However, if both your father and mother are senior citizens, or if either is, the maximum tax rebate limit in a fiscal year increases to Rs 50,000.

Deduction section 80D of the income tax act makes this possible –

Section 80d medical expenditure allows you to claim a tax deduction for medical insurance premiums of up to Rs 25,000 per fiscal year. This limit applies to health insurance premiums for you, your spouse, and your dependent children.

Section 80D deduction for preventive healthcare exams –

Annual tax deductions for preventive health check-ups are available under Section 80D. The government implemented it to encourage people to have regular preventive health check-ups to detect an illness or health condition in time. You can claim this tax break if you pay for a preventive health check-up for yourself, your spouse, your children, and your parents.

There are no tax advantages to making a cash payment –

Medical insurance premiums must be paid in non-cash modes to qualify for Section 80D deductions under the Income Tax Act. You can pay the premium via online banking, check, demand draft, debit or credit card, etc. The Section 80D deduction is unavailable if the compensation is paid in cash. **

How much tax deduction can you get under section 80D?

Let’s look at an example to understand the Section 80D deduction limit better:

Assume you have a family of six people: yourself (35), your spouse (34), two children (11 and 7), your father (63), and your mother (59). For a yearly premium of Rs 15,000, you bought a family floater health insurance plan that covers you, your spouse, and your children.

Furthermore, you have paid your parent’s medical insurance a Rs 30,000 yearly premium. You’ve also paid Rs 15,000 for your health check-up and Rs 10,000 for your parents’.

Section 80D deduction for super senior citizens –

Section 80D Tax deduction:

Section 80D of the ITA includes a provision of senior citizen health insurance for senior citizens aged 80 and up. According to Income Tax Section 80D, super senior citizens who do not have a health insurance policy can claim a deduction of up to Rs 50,000 for medical check-ups and treatments each fiscal year. This 80D deduction, however, does not apply to their expenses.

Let us illustrate this with an example. Assume you are 60 years old and have paid a health insurance premium annually of Rs 30,000 for yourself and your dependents. You also pay a Rs 35,000 premium for your parent’s health insurance because they are super senior citizens (over 80). As a result, you can take advantage of the following benefits:

  • Tax benefit of Rs 30,000 on the Rs 30,000 health insurance premium paid for your dependents and yourself.
  • Tax breaks of Rs 35,000 on medical treatments and health check-ups for your parents, who are super senior citizens.
  • A tax deduction of Rs 65,000 is allowable under Section 80D. **

* Standard T&C Apply

** Currently, there are 2 tax regimes in India – new and old. To get the tax benefit you desire, choose the correct one after consulting an expert. You can opt for a regime change during the next financial year.

# Visit the official website of IRDAI for further details.

## All savings are provided by the insurer as per the IRDAI-approved insurance plan. Standard T&C apply

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.


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