Section 80D of Income Tax is an important provision for claiming health insurance tax benefits for individuals and families (including Hindu Undivided families, i.e., HUF). It provides premium tax benefits on the amount an individual or a family spends on medical expenses and health insurance premiums. Whether buying an individual plan or a family floater plan, you can take advantage of tax benefits. This article will help you understand how to claim the tax benefits under Section 80D of Income Tax and how to maximise your savings. For ease of understanding, the article has been classified under the following:
- What is Section 80D of the Income Tax Act 1961?
- Who is eligible to claim tax deductions?
- What payments are eligible for tax benefits under Section 80D?
- When can you claim tax deductions on premiums of health insurance?
- Claiming Tax Benefits under Section 80D
What is Section 80D of the Income Tax Act 1961?
Under section 80D, you can claim tax deductions on any medical insurance premiums you've paid for yourself, your spouse, your parents, and your dependent children. Both individuals and Hindu Undivided Families (HUFs) can claim this deduction. The limit varies depending on the age of the insured. If the insured are under the age of 60, you're entitled to a deduction of INR 25,000 for yourself (spouse and children included). With an additional INR 25,000 available for insurance premiums paid for your parents. If any of the insured is over 60 age, you can claim a deduction of INR 50,000 instead of INR 25,000.
Who is eligible to claim tax deductions?
Only individuals and HUF taxpayers can claim tax deductions for medical insurance premiums and expenses incurred by senior citizens. Whether an individual or HUF taxpayer can take insurance for the following, i.e.,
- Self
- Parents
- Spouse
- Dependent children
The value of premium tax benefits that can be claimed can vary based on the insured's age and the people being covered under the health insurance.
(Note: Firms, organisations, and companies cannot claim any tax deductions under 80D)
What payments are eligible for tax benefits under Section 80D?
Given below is a list of payments against which HUF and an individual is eligible for tax benefits (or deductions):
- Amount donated to the Central Government Health Scheme or any scheme that the government has announced
- Medical expenses that have been paid for the health of a senior citizen who is 60 years or older and is not protected under any health insurance policy
- Payment made, other than cash, to cover the medical insurance premium for oneself, one's spouse, children, or dependent parents
- Expenses related to a preventive health check-up
- When can you claim tax deductions on premiums of health insurance?
Health insurance tax benefits on premiums are limited to the specific financial year they were paid. If you pay a premium for the fiscal year 2022-23, you can only claim a tax deduction while filing your income tax return (ITR). You cannot claim deductions for premiums that were paid in the previous financial year or will be paid in the upcoming financial year.
Claiming Tax Benefits under Section 80D
The following table summarises the deduction amount that an individual taxpayer in different scenarios can claim:
The following table summarises the deduction amount that an individual taxpayer in different scenarios can claim:
| Scenario | Maximum available deductions on premiums of health insurance for Self (in INR) | Maximum available deductions on premiums of health insurance for Parents (in INR) | Total Deductions Available under 80D (in INR) |
| Self (spouse and children included). Age under 60 years. Parents not covered. | 25000 | Not applicable | 25000 |
| Self (spouse and children included). Age under 60 years. Parents covered and age of parents under 60 years. | 25000 | 25000 | 50000 |
| Self (spouse and children included). Age under 60 years. Parents covered and age of parents above 60 years. | 25000 | 50000 | 75000 |
| Self (spouse and children included). Age above 60 years. Parents covered and age of parents above 60 years. | 50000 | 50000 | 100000 |
Scenario 1: You are purchasing a health plan for yourself (spouse and children included), and your age is below 60. You are not purchasing medical insurance for your parents. In such a case, you can claim tax benefits up to INR 25000.
Scenario 2: You are purchasing a health plan for yourself (spouse and children included), and your age is below 60. You are purchasing medical insurance for your parents, who are under 60. In such a case, you can claim tax benefits up to INR 50000.
Scenario 3: You are purchasing a health plan for yourself (spouse and children included), and your age is below 60. You are purchasing medical insurance for your parents, who are above 60. In such a case, you can claim tax benefits up to INR 75000.
Scenario 4: You are purchasing a health plan for yourself (spouse and children included), and your age is above 60. You are purchasing medical insurance for your parents, who are above 60. In such a case, you can claim tax benefits up to INR 100000.
NOTE: An HUF (Hindu Undivided Family) is eligible for a deduction under Section 80D if they have taken medical insurance for any of their members. The amount of the deduction depends on the age of the insured member. If the member is below 60 years, the deduction is INR 25,000. If the insured member is 60 years or older, the deduction is INR 50,000.
Section 80D of the Indian Income Tax Act 1961 allows individuals and Hindu Undivided Families (HUFs) to claim tax deductions on medical insurance premiums for themselves, their spouses, parents, and dependent children. The limit for deductions varies depending on the age of the insured. If the insured is under 60, a deduction of INR 25,000 can be claimed for self, spouse, and children, with an additional INR 25,000 for parents. If the insured is over 60, the deduction is INR 50,000 instead. Tax deductions can also be claimed for expenses incurred on medical insurance premiums, preventive health check-ups, and medical expenses for senior citizens not covered under any health insurance policy. The tax benefits are limited to the specific financial year the premiums were paid. HUFs can also claim deductions based on the age of the insured member.
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