While all citizens of India have to pay taxes, the law also provides a measure of relief. As per the Income Tax Act, 1961 (the Act), eligible taxpayers can avail deductions of certain types of payments. A deduction is basically a reduction from taxable income, ultimately resulting in reducing the amount of tax payable by you. Read on to learn about the specific deductions under Section 80D of the Act.
What is Section 80D of the Act?
Section 80D of the Act, allows taxpayers like you to avail deduction from your total income on the total premium you pay towards health insurance in a financial year. This section is applicable to regular health insurance premiums and also includes premiums paid on top-up and critical illness plans. You can make the most out of the Section 80D deductions on premiums paid while buying health insurance for yourself, your spouse, dependent children, and your parents.
How much tax deduction is available under Section 80D?
The amount of tax deduction available under Section 80D depends upon who is covered by the health insurance policy. The table below illustrates the different slabs:
In case of Individuals:
Covered Individuals | Premium Paid Upto (₹) | Deduction under section 80D (₹) | |
For Self, Spouse and Dependent Children | For Parents | ||
Self, Spouse and Dependent children and parents below the age of 60 years | 25,000 | 25,000 | 50,000 |
Self, Spouse and Dependent children below the age of 60 years but parents are resident in India aged 60 years and above | 25,000 | 50,000 | 75,000 |
Self, Spouse and Dependent children and parents are resident in India and the age of 60 years and above | 50,000 | 50,000 | 1,00,000 |
Non-resident individuals | 25,000 | 25,000 | 50,000 |
In case of HUF:
Covered Individuals | Premium Paid Upto (₹) | Deduction under section 80D (₹) |
Any Member of HUF (below 60 years) | 25,000 | 25,000 |
Any Member of HUF (age 60 years and above) | 50,000 | 50,000 |
As clearly indicated by the table, under Section 80D, you can claim a deduction of up to ₹25,000 per financial year. This limit is applicable on premiums paid towards health insurance that you purchase for yourself, your spouse, and your dependent children.
If either you or your spouse is a senior citizen of the age of 60 years and above, then the limit goes up to ₹50,000.
If you and your family are members of a HUF, then the HUF can claim the deduction up to ₹25,000 (aged less than 60 years) and ₹50,000 (age 60 years and above).
Deductions on preventive health check-ups:
Furthermore, you can also avail of deductions on the cost of preventive health check-ups undertaken annually. This measure was introduced by the government in an attempt to encourage more people to get regular health check-ups. The aim was to detect an illness or health condition in time for treatment. You can avail of this deduction on payments made towards preventive health check-up undertaken for yourself, your spouse, children, and parents.
Under Section 80D, you can claim deductions up to ₹5,000 per financial year for payment made for preventive health check-up. Do note that this deduction is included within the individual and senior citizen limit mentioned before.
Tax benefits on cash payments:
To avail of the deductions available under Section 80D, you have to make the premium payments for health insurance via non-cash modes only. You can do so via net banking, cheques, demand drafts, credit or debit cards, etc. Section 80D will not apply if you make such payments via cash.
However, you can pay for preventive health check-ups via cash. You will still be able to avail of the deductions under Section 80D subject to the limits mentioned before.
Now that you know more about the deductions available under Section 80D of the Income Tax Act, 1961, avail of the benefits while paying premiums for health insurance. Make sure to pay via methods other than cash and save money while filing your income tax returns!
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*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. You are recommended to obtain specific professional advice from before you take any/refrain from any action. Tax benefits are subject to changes in tax laws. Please contact your tax consultant for an exact calculation of your tax liabilities.