How Section 80D of Income Tax Act: Health Insurance Tax Benefits

How Section 80D of Income Tax Act: Health Insurance Tax Benefits

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Bajaj Finserv Health
November 16, 20214 mins read

Key Takeaways

  • Understanding health insurance tax benefits helps you to save more
  • Individuals can claim deductions up to Rs.25,000 as per 80D Income Tax Act
  • Seniors citizens get up to Rs.50,000 on premiums as per 80D of Income Tax Act

Investing in a health insurance plan can give you umpteen benefits. They offer coverage of medical expenses as well as health insurance tax benefits. Just like life insurance policies, healthcare plans are also effective tax-saving instruments. However, like many people, you may wonder health insurance comes under which section?

Not knowing the details of this section can hold you back from availing the full tax-saving benefit offered on health policies. As per Section 80D of Income Tax Act, you can get substantial exemption from tax based on the premiums you pay for health insurance. Read on to know more about health insurance tax benefits and the deductions available under 80D of Income Tax Act.

Additional ReadImportance of Health Insurance: 4 Reasons to Have Health Insurance in India

What is Section 80D Income Tax Act all about?

If you are paying the medical insurance premium, 8OD Income Tax Act can help you claim deductions. Be it any type of health insurance policies like mediclaim for senior citizens, family floater, individual or top-up health plans, you are eligible to avail this benefit. In fact, this section has specifically been amended for senior citizens considering the higher amount of premiums they have to pay. To address this, there is a tax deduction allowed on medical expenses of senior citizens that can be claimed by them or their children.

Under the Section 80D of Income Tax Act, you can avail tax benefits against the health insurance plans for the following. 

  • Your spouse 
  • Yourself 
  • Parents
  • Dependent children

However, any other entity such as a company is not eligible to claim any deduction under this section. If you are claiming exemptions as an individual or Hindu Undivided Family (HUF), you can get deductions in following cases. 

  • You are paying health insurance premiums for your family in any form other than cash 
  • You have incurred expenses for preventive health checkups
  • You have invested in health insurance for senior citizens
  • You have contributed towards any government health scheme

What is the amount of deduction allowed under Section 80D?

The amount of deduction applicable for a financial year as per this section is Rs.25,000 for the insurance premiums paid. However, if you are a senior citizen, your deduction limit is of Rs.50,000. To understand it even better, have a look at the following table [2].

SCENARIO DEDUCTION ELIGIBLE UNDER THIS ACT FOR PREMIUMS PAID (Rs.)  
You are an individual with parents below 60 years of age 50,000  
Your age is under 60 and your parents are senior citizens 75,000  
Your parents, your spouse and you are above 60 years of age 1,00,000  
You are a member of HUF 25,000 
You are an NRI 25,000 
Additional read6 Important Tips to Choose the Right Senior Citizen Health Insurance Policyhow to claim 80D deduction

Does Section 80D of Income Tax Act include preventive health checkups?

Preventive health checkups have also been included as a part of this Act. The goal behind this is to encourage people to take proactive steps towards their health. With the help of preventive health checkups, it becomes easier to address your health issues right at the beginning.

According to 80D, you get a deduction of Rs.5000 in cases of preventive health checkups. However, this deduction is within the overall limit of Rs.25,000 and Rs.50,000. One fact to note here is the cash payment is also accepted as the payment mode to claim the deduction.

Are you eligible for deductions if you invest in a single premium policy?

In case you have invested in a single premium policy, you are eligible to claim deductions under Section 80D. However, your policy has to be valid for more than a year in order to avail this deduction. You can claim a deduction that is equal to the appropriate fraction of the amount, which is calculated by dividing the total premium with number of policy years.

What are the documents required to claim income tax deduction?

You can claim tax deduction with the following documents.

  • A copy of premium payment receipt 
  • A copy of insurance policy document with name and age of family members

Now that you have a clear understanding of Section 80D, make sure you read the tax exemptions in your policy properly. Apart from safeguarding your pocket, a health insurance policy is an ideal investment as you can avail tax benefits too. Choose the best medical insurance policy keeping this aspect in mind.

You can browse through a range of Aarogya Care Plans on Bajaj Finserv Health. These comprehensive healthcare plans cover unique features like online doctor consultations, preventive health checkups, lab tests and more. You can also avail discounts at hospitals listed in Aarogya Care network. Invest in healthcare plans today and secure the future of your loved ones!

How Section 80D of Income Tax Act: Health Insurance Tax Benefits banner
  1. https://www.incometaxindia.gov.in/tutorials/20.%20tax%20benefits%20due%20to%20health%20insurance.pdf
  2. https://cleartax.in/s/medical-insurance

Please note that this article is solely meant for informational purposes and Bajaj Finserv Health Limited (“BFHL”) does not shoulder any responsibility of the views/advice/information expressed/given by the writer/reviewer/originator. This article should not be considered as a substitute for any medical advice, diagnosis or treatment. Always consult with your trusted physician/qualified healthcare professional to evaluate your medical condition. The above article has been reviewed by a qualified doctor and BFHL is not responsible for any damages for any information or services provided by any third party.

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