Section 80D Deductions
Last Updated : April 5, 2021, 6:29 p.m.
Every Individual must get a health insurance plan to meet the financial crisis during a medical emergency. But it is a common doubt if a person doesn’t face any health issues during the policy term then all the premiums become void. Well, it is not so because you can get Section 80D deductions while computing your taxable income through the health insurance premiums. You are allowed to claim for tax deductions under Section 80D of the Income Tax Act 1961 for the health insurance premiums you pay for yourself, spouse, dependent parents, and dependent children. Even the Hindu Undivided Family can claim for these deductions. Let’s explore the benefits of Section 80D and the deductions available in it.
Deduction Under Section 80D of the Income Tax Act 1961
You must explore the Eligibility, Rules, and Exclusions of this deduction and see how you can cut your tax liability in the end.
Deductions for Self and Family
- You are allowed a maximum deduction of ₹25000 on the health insurance premiums paid for yourself and your family.
- The maximum deduction amount will increase to ₹50000 if you a senior citizen and you are paying the premiums for self and your family.
- You will get a maximum deduction of ₹25000 on the health insurance premium for parents.
- The maximum deduction amount will increase to ₹50000 if you are paying the premiums for senior citizen parents.
Health Expenses Deductions
You can even claim for an additional 80D deduction for a Sum of up to ₹5000 for the expenses related to health check-ups for the entire family. If you are going for the treatment of disability of a dependent then you can claim for deduction under Section 80DD .
Exclusions of Section 80D Deductions
- If you are not the proposer of the health plan and making payments of insurance premiums for your children, siblings, and grandparent’s behalf then you are not eligible for this health insurance premium deduction.
- This deduction is applicable to any relative who is covered under your policy.
- If you are making payments of the health premiums in cash then you are not entitled to any deductions.
- You will get preventive health benefits even through cash payments.
- If your company has taken a group health policy then the premium of that insurance is not eligible for deduction but if in case you pay an extra premium to enhance your coverage then you are eligible for the deduction for that extra amount only.
- There are no deductions on the amount paid as GST or Cess with the premiums of the health policy.
Eligibility for Tax Deductions
The individual is only eligible for Section 80D deductions if he is the proposer of the policy and the policy is taken for any of the following or all of them:-
- Individuals or Self
- Spouse
- Children
- Parents
Maximum Limit for the Deductions Under Section 80D
| Persons Covered under the Insurance Plan | Exemption Limit for Health Premium | Exemption Limit for Health Check-up | Maximum Exemption Limit u/s 80D |
|---|---|---|---|
| Self + Family | ₹25000 | ₹5000 | ₹25000 |
| Self + Family + Parents | ₹50000 (₹25000 + ₹25000) | ₹5000 | ₹55000 |
| Self + Family + Senior Citizen Parents | ₹75000 (₹25000 + ₹50000) | ₹5000 | ₹80000 |
| Self (Senior Citizen) + Family + Senior Citizen Parents | ₹100000 (₹50000 + ₹50000) | ₹5000 | ₹105000 |
Conclusion
There are a lot of deductions in the Income-tax Rules and you can reduce your tax liability by using them. You can claim for the Deduction under Section 16 of the income tax act and get rid of some tax burden. On the other hand, you can also enjoy Tax Rebates under Section 87A and reduce your taxable income. So, there are a lot of benefits hidden in the income tax rule and you must be aware of all of them before computing your income and paying the taxes.