Section 80D Deduction

Section 80D deduction can be claimed by taxpayers from gross total income for health insurance premium, contribution to Central Government Health Scheme and preventive health checkup.

Income Tax Deduction for Health Insurance & Medical Expenses

The deduction under Section 80D can be claimed for health insurance premium paid, contribution to Central Government Health Scheme and expenses incurred for preventive health checkup. Its very important to note that deduction can be claimed only for premium or contribution paid through online banking, credit card, debit card, cheque or demand draft. Only for preventive health checkup, cash payment made by the taxpayer can be claimed as deduction.

Income Tax Deduction for Health Insurance
Medical insurance can help taxpayers reduce cost of treatment, in the case they fall sick or become injured. Medical insurance not only helps meet unexpected medical expense, but can also help save taxes under Section 80D. In case of medical insurance is purchased for the taxpayer, spouse or dependent children, the maximum deduction allowed is Rs.25,000. In case, any of the person covered, including parents is over the age of 60, then a tax deduction of upto Rs.30,000 can be claimed under Section 80D.
Central Government Health Scheme
Central Government Health Scheme provides a comprehensive medical care to Central Government employees and Pensioners enrolled under the scheme. Central Government employees and their dependant family members residing in CGHS covered areas can enroll under the scheme. In case contributions are made to Central Government Health Scheme, a deduction of upto Rs.25,000 is permissible if the persons covered are below the age of 60. In the contribution covers a taxpayer, spouse or parent above the age of 60, a maximum deduction of Rs.30,000 can be availed.
Preventive Health Checkup
In addition to health insurance premium paid or contribution to Central Government Health Scheme, taxpayers can also claim deduction for expenses incurred for preventive health checkups. The Rs.50,000 deduction for health checkup under Section 80D is within the overall limit of Rs.25,000 or Rs.30,000.
Income Tax Deduction for Health Insurance

Tax Planning for the Family

Taxpayers having large family with spouse, dependent children and parents can claim a tax deduction of upto Rs.65,000 under Section 80D, if tax planning is done professionally. Most taxpayers enjoy significant amount of deduction under Section 80D. Hence, every year, the taxpayer must consider cost of insurance premiums, cost of treatment and the related tax benefit to maximize wealth.

Deduction for Self, Spouse and Dependent Children

In case a taxpayer claims deduction for self, spouse and dependent children and no family member has reached the age of 60, a maximum deduction of Rs.25000 can be claimed under Section 80D. In case the taxpayer is over the age of 60 (senior citizen or very senior citizen), a maximum deduction of Rs.30,000 can be claimed. In the overall deduction limit, the taxpayer can also claim deduction for any expense incurred for preventive health checkups.

Deduction for Self, Spouse and Dependent Children
Deduction for Parents

Deduction for Parents

In case medical insurance premium or health checkup expense is incurred for parents by the taxpayer, an additional deduction of upto Rs.25,000 can be claimed if both parents are below the age of 60. In case any of the parent is over the age of 60 years, the maximum deduction allowed under Section 80D will be Rs.30,000. In the overall deduction limit, the taxpayer can also claim deduction for any expense incurred for preventive health checkups.

Section 80D - Income Tax - Bare Act

  • 80D. Deduction in respect of health insurance premia:-
    (1) In computing the total income of an assessee, being an individual or a Hindu undivided family, there shall be deducted such sum, as specified in sub-section (2) or sub-section (3), payment of which is made by any mode, other than cash, in the previous year out of his income chargeable to tax.
  • Where the assessee is an individual, the sum referred to in sub-section (1) shall be the aggregate of the following, namely:-
    • the whole of the amount paid to effect or to keep in force an insurance on the health of the assessee or his family as does not exceed in the aggregate fifteen thousand rupees; and
    • the whole of the amount paid to effect or to keep in force an insurance on the health of the parent or parents of the assessee as does not exceed in the aggregate fifteen thousand rupees. Explanation.—For the purposes of clause (a), "family" means the spouse and dependant children of the assessee.
  • Where the assessee is a Hindu undivided family, the sum referred to in sub-section (1) shall be the whole of the amount paid to effect or to keep in force an insurance on the health of any member of that Hindu undivided family as does not exceed in the aggregate fifteen thousand rupees.
  • Where the sum specified in clause (a) or clause (b) of sub-section (2) or in sub-section (3) is paid to effect or keep in force an insurance on the health of any person specified therein, and who is a senior citizen, the provisions of this section shall have effect as if for the words "fifteen thousand rupees", the words "twenty thousand rupees" had been substituted.
    Explanation:- For the purposes of this sub-section, "senior citizen" means an individual resident in India who is of the age of sixty-five years or more at any time during the relevant previous year.
  • The insurance referred to in this section shall be in accordance with a scheme made in this behalf by:-
    • the General Insurance Corporation of India formed under section 9 of the General Insurance Business (Nationalisation) Act, 1972 (57 of 1972) and approved by the Central Government in this behalf; or
    • any other insurer and approved by the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999).

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