Medical costs are increasing significantly in India and health should be taken care of on priority. Health insurance or Medical insurance is you must have for yourself and your family (especially for senior citizens). Therefore, it is necessary to have an adequate health cover.
Health insurance safeguards you and your family members from the unexpected financial burden that may arise in case of medical emergencies. The health insurance is not only the safeguard during illness or accidents but also provides tax benefits to you.
Benefit of having the Insurance Policy:
The medical insurance premium paid is allowed to claim as deduction under section 80D of the Income Tax Act, 1961. Every individual and HUF can claim the deduction for:
- Yourself
- Your Spouse
- Your Parents
- Dependent Children
It should be noted that the deduction under section 80D is in addition to the deductions that are claimed under section 80C/80CCC/80CCD deductions.
However, the premium paid towards a brother, sister, grandparents, aunts, uncles, or any other relative cannot be claimed as a deduction for taking tax benefit.
How much deduction is allowed under section 80D?
Health insurance premium paid:
Individual:
- An individual can claim the deduction upto Rs. 25,000 per year for the payment of medical insurance premium.
- Payment of premium is covered for self, spouse, and dependent children.
- In the case of a senior citizen (above the age of 60 years), you can claim deduction to the extent of Rs. 50,000. Here, Senior citizen will also include very senior citizen (above 80 years)
HUF:
- An HUF can claim a deduction under section 80D for a mediclaim for any of their members.
- If the member has the age less than 60 years, then deduction will be Rs.25,000 and Rs.50,000 if the insured is 60 years of age or more.
Non-Resident:
Non-residents are also eligible to claim deduction under Section 80D. The limit of deduction is INR 25,000 for premiums paid for themselves/members of the family and INR 25,000 for policies for parents.
Preventive Healthcare Checkups
- A payment of Rs. 5,000 per year towards the expenses associated with Preventive Healthcare Checkups is also allowed under section 80D.
- If you incur expenses for health check-ups for yourself, parents, and children. The amount of deduction in such cases will be Rs. 5,000. However, this amount is included in the payment of Rs. 25,000 or Rs. 50,000 as the case may be.
- This deduction can be claimed either by the individual for himself, spouse, dependent children or parents.
Company Group Health Scheme:
- Group Health Insurance premium provided by the company is not eligible for deduction.
Here is the table clarifying the combined amount for the payment of premium and Preventive Healthcare Checkups eligible for deduction:
| Deduction for individuals | ||||
| Nature of Amount spent | Family Members (Individual, spouse and dependent children) | Parents | ||
| Age below 60 years | Age above 60 years | Age below 60 years | Age above 60 years | |
| Medical Insurance | 25,000 | 50,000 | 25,000 | 50,000 |
| Health Check-up | 5,000 | 5,000 | 5,000 | 5,000 |
| Maximum Deduction | 25,000 | 50,000 | 25,000 | 50,000 |
| Deduction for HUF | ||
| Nature of Amount spent | For any member | |
| Age below 60 years | Age above 60 years | |
| Medical Insurance | 25,000 | 50,000 |
| Health Check-up | – | – |
| Maximum Deduction | 25,000 | 50,000 |
Section 80 deduction is a great way to reduce tax liability.
Mode of payment for availing deduction under section 80D
Payment of Insurance premium should be made through online banking modes such as net banking, debit card, credit card, or cheque. Hence, no deduction is allowed for any premium payment made in cash.
Payments for Preventive Healthcare Checkups can be made in cash to get deduction under section 80.
Other Medical treatment Related deductions:
Section 80DD: Medical Treatment for dependent with disability
A resident individual or HUF can claim deduction under section 80DDB for the following medical expenses incurred on a person (spouse, parents, children or siblings) with disability:
- Nursing,
- Training
- Medical Treatment
- Preservation
- Rehabilitation
The deduction allowed is upto Rs. 75,000. However, The person with severe disability, can claim up to Rs. 1,50,000.
Section 80DDB: Medical Treatment
A resident individual or any member of HUF can get a deduction for the medical expense paid for any disease or ailment prescribed under rule 11DD such as cancer, chronic renal failure etc.
Section 80DDB allows a deduction up to Rs. 40,000 (in case of age less than 60 years) or Rs. 1,00,000 (in case of senior citizen i.e. age more than 60 years) for the treatment of specified critical ailments.
Section 80U: Person with disability
Person with a disability (who is physically and mentally challenged) can claim deduction up to Rs. 75,000. However, in case of severe disability, the person can claim deduction up to Rs. 1,25,000.