Section 80D- Meaning, Eligibility & Applicability

We are often caught off guard when it comes to medical emergencies. It is always preferable to be safe than sorry, and medical insurance is no exception.

In India, the majority of the people do not have health insurance and must rely on their savings or borrowing in the event of a medical emergency. Medical insurance is a must-have in your financial portfolio, as the government encourages everyone to acquire it and provides tax benefits under Section 80D.

What does Section 80D entail?

Section 80D allows any individual or HUF to deduct medical insurance premiums paid in any given year from their total income. Top-up health insurance and critical sickness plans are also eligible for this deduction.

The advantage is accessible not just for purchasing health insurance coverage for yourself, but also for purchasing a policy to cover your spouse, dependent children, or parents.

The nicest aspect is that it goes above and beyond the Section 80C deductions.

Who is eligible for a Section 80D deduction?

Individuals and HUF taxpayers are the only ones who can deduct medical insurance premiums and medical expenses for older persons.

Individual or HUF taxpayers, insurance can be availed for:

• Self.
• Spouse.
• Reliant children.
• Parents.

This deduction is not available to any other entity. A company or a firm, for example, cannot claim a deduction under this clause.

Payments that qualify for a Section 80D deduction

For the payments listed below, an individual or HUF can claim a deduction under Section 80D:

• A medical insurance premium is paid in any form other than cash for oneself, one’s spouse, one’s children, or one’s dependant parents.
• Expenses incurred as a result of a preventative health check-up
• Medical costs incurred on the health of a senior adult (60 years or older) who are not covered by a health insurance plan.
• Contribution to the Central Government’s health scheme or any other government-approved scheme.

What is the maximum deduction under section 80D?

As seen below, the maximum deduction permitted varies depending on the scenario:

• Individuals can deduct up to Rs 25,000 in insurance premiums for themselves, their spouses, and their dependent children.
• Individuals can claim a maximum deduction of Rs 50,000 for premiums paid on behalf of I themselves, spouses, dependent children, and (ii) parents under the age of 60.
• Individuals, on the other hand, can claim a maximum deduction of Rs.75, 000, which includes a premium for self, spouse, dependent children, and (ii) parents over the age of 60.
• Furthermore, if an individual is over 60 years of age and pays premiums for self, spouse, dependent children, and dependent parents over 60 years of age, a maximum deduction of Rs 1,00,000 can be claimed.

How to claim deduction under section 80D?

Individual health insurance and family floater plans are eligible for tax deductions. Premiums paid for health insurance for yourself, your spouse, your dependent children, and/or your dependent parents are deductible.

Unemployed male children under the age of 25 or unmarried female children under the age of 25 are both eligible dependent children.

Premiums paid for siblings’ health insurance are not eligible for a tax deduction. Pemium payments can be made online or offline, except cash. Debit cards, credit cards, and net banking are all acceptable online payment methods.

What is a preventive health check-up under 80D?

In 2013-14, the government implemented a preventative health checkup deduction to encourage citizens to be more health-conscious. The goal of preventative health checkups is to detect any sickness and decrease risk factors early on by seeing a doctor regularly.

Payments for preventative health check-ups are deducted at a rate of Rs 5,000 under Section 80D. This deduction will be limited to Rs 25,000/Rs 50,000, depending on the situation.

Individuals can claim this deduction for themselves, their spouses, their dependent children, or their parents. Cash can be used to pay for preventive health screenings.

Final Thoughts

• A medical insurance premium paid for a brother, sister, grandparents, aunts, uncles, or any other relative is not deductible for tax purposes.
• Premiums paid on behalf of working children are not tax-deductible.
• If you and a parent each paid a portion of the bill, you can each claim a deduction for the amount you paid.
• The deduction must be made without revealing the percentage of the premium amount that is subject to service tax and cess.
• The company-provided group health insurance premium is not tax-deductible.
• The deduction is allowed for premiums paid by any method other than cash. As a result, premiums paid by credit card or by another online method are also eligible for deduction.