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Section 80D Deductions: Deductions Under Medical Insurance, Eligibility and Tax Benefits

Updated on: 16 Jan, 2024 05:49 PM

Medical emergencies can occur anytime and anywhere. It is always said that staying safe is better than saying sorry. In a medical emergency, taxpayers can claim reimbursement from their medical insurance provider for the medical expenses incurred. The reimbursed amount can be claimed as a deduction under Section 80D of the Income Tax Act, subject to the maximum limit specified. Health insurance is one of the key investments that must be included in your portfolio. The government encourages everyone to buy medical insurance and thus has allowed deductions under Section 80D.

What is Section 80D of the Income Tax Act?

Section 80D of the Income Tax Act 1961 was introduced to promote health planning. Under this section, taxpayers can claim deductions and tax benefits under health insurance premiums. Section 80D provides a deduction for expenditure on the:

  • Medical insurance premium
  • Contribution to CGHS(Central Govt Health Scheme)/notified scheme
  • Preventive health check-ups, and
  • Medical expenditure (in case of senior citizens).

The amount on Section 80D deduction depends upon the type of expenditure, mode of payment, and the age & relation of the person for whom expenditure has been done.

Who is eligible to claim Tax deductions under Section 80D?

Individuals or HUF can claim Section 80D deduction for:

  • Self
  • Spouse
  • Parents
  • Dependant Children

What is the maximum deduction that can be claimed under Section 80D?

For claiming deduction u/s Section 80D, the premium should be paid in any mode other than cash. Although the expenditure on preventive health check-ups can be incurred in cash. The deduction for the following premiums is allowed under section 80D -

Type of Expense Premium Paid
Medical insurance premium paid for individuals and families. Rs. 25,000, Rs. 50,000(in case of senior citizen)
Medical insurance premium paid for your parents. Rs. 25,000 Rs. 50,000(in case of senior citizen)
Expenditure on preventive health check-ups. Rs.5,000
Medical expenditure of senior citizens or super senior citizens. Rs.50,000
Contribution to CGHS/notified scheme. Rs.25,000 Rs.50,000(in case of senior citizen)
Maximum amount of deduction (A+ B+C+D+E)
Non-senior citizens(Self & family and Parents)
Senior Citizens (Self & family and Parents)
Self & family (Non-senior citizens)Parents(Senior Citizens)

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A. Medical Insurance Premium: For Yourself & Your Family

  • The maximum amount of deduction on the policy taken by you for self & for family is Rs. 25,000/-.
  • In case of a senior citizen or any of your family members is a senior citizen(aged 60 years or more), the deduction amount will be Rs. 50,000/-.

Note: Under the 80D deduction, Family means your spouse & dependent children.

B. Medical Insurance Premium: For Parents

  • In addition to the above, you can claim a deduction of the medical insurance premium paid u/s 80D for your parents as well.
  • The maximum amount of deduction is Rs. 25,000/-. If your parents are senior citizens, the deduction will be Rs.50,000/-.

Notes :

  1. Parents for 80D include father and mother(whether dependent or not). Father-in-law and mother-in-law are not included.

C. Preventive Health Check-Up

Preventive Health check-ups identify the illness and work at the initial level through regular health check-ups. It is conducted once or twice yearly by your physician or general practitioner. The government introduced deduction under preventive health checkups to encourage people to be more proactive towards health. It was implemented in the year 2013-14.

The cumulative deduction for this check-up is a maximum of Rs. 5,000/- for yourself, your family, and your parents. Even cash payment for this expenditure is eligible for an 80D deduction.

D. Deduction of Medical Expenditure on Senior Citizens (aged 60 & above)

The expenditure is allowed for the deduction when no medical insurance premium is paid for the senior citizen. The term medical expenditure has not been defined under the income tax act, but generally, it will include medical expenses such as medical consultation fees, medicines, impairment aid, etc.

The maximum deduction amount is Rs. 50,000/-.

E. Contribution to CGHS/notified scheme

Contribution to Central Govt Health Scheme(CGHS) or any other notified scheme is allowed to individuals for themselves and their family for Rs.25,000.

Any contribution for parents is not allowed for deduction.

Section 80D: Amount of deduction comparative chart for current & previous years

Section 80D

*Preventive Health Check up is included in overall limits

*Family includes spouse and dependent children

Example for the calculation of 80D Deduction

Ram(57 years) is a tax-payer. Other members of his family are Sita(55 years old, Ram’s wife), Lav and Kush (dependent children), and his Parents. The following expenditures incurred by Ram for FY 2023-24:

Ram, Sita, Lav & Kush Parents
Medical insurance premium paid by cheque 22000 -
Medical Expenditure paid by cheque - 47,000
Medical Expenditure paid by cash 7000 5000
Preventive health-check-up 8000 4000

80D Deduction Amount

Ram, Sita, Lav & Kush Parents
Medical insurance premium paid by cheque 22000 -
Medical Expenditure paid by cheque - 47,000
Medical Expenditure paid by cash Not eligible since available for senior citizen, for whom medical policy not taken Not allowed cash expenses.
Preventive health-check-up 3000(maximum limit is 25000 since 22,000 is utilized, only 3000 can be claimed ) 2000(maximum limit is 50000 since 47,000 utilized, remaining 3000. However, preventive health check-up has an overall limit of 5000, out of which 3000 are used for self and family, so only 2000 can be claimed now)
Total 80D deduction that Ram can claim is Rs. 74,000 25000 49000

Notes : *The amount of deduction u/s 80D will remain the same for the FY 2022-23 and FY 2023-24 (old income tax slab).

Deduction for HUF

  • A medical claim can be taken under Section 80D for any of the members of HUF.
  • The maximum amount of deduction is Rs. 25,000/-. If the member is a senior citizen, then the maximum deduction will be Rs. 50,000/-.
  • HUF is not eligible to claim a deduction for a preventive health check-up.

Deduction on Single Premium Medical Insurance Policies

In such policies, a one-time lump sum payment is made against the regular installment for the complete policy tenure. Since the payment is a one-time payment, the deduction will be allowed on a proportionate basis.

  • Amount Eligible under section 80D = Single Premium Paid / Number of years for which policy has been taken.
  • The limit of 25,000 for individuals below 60 years of age and Rs 50,000 for others shall also apply in this case.

What are the factors excluded under Section 80D?

No deduction on the following amounts shall be allowed under section 80D:

  • Premiums paid in cash (except for preventive health checkups)
  • Premiums and expenses paid by a person other than the taxpayer.

What is the difference between sections 80D, 80DD, 80DDB, and 80U?

Sections 80D, 80DD, 80DDB, and 80U are different sections under the Indian Income Tax Act that provide deductions to taxpayers for various medical and disability-related expenses. Here's a brief overview of each section:

Particulars 80D 80DD 80DDB 80U
Purpose Medical Insurance & Medical expenditure Medical treatment of a disabled dependent Medical Treatment of Self/Dependant for specified diseases Medical treatment of disabled assessee (self)
Maximum Limit 1,00,000 75,000(non-severe disability) 1,25,000(severe disability) 40,000(age < 60) 1,00,000 (age 60 or above) or amount spent whichever is less 75,000(non-severe disability) 1,25,000(severe disability)
Type of assessee Individual/HUF Resident Individual/ HUF Resident Individual/ HUF Resident Individual

Exclusions under Section 80D of the Income Tax Act

  • Premiums Paid in Cash: Any premium paid in cash for health insurance policies is not eligible for deduction under Section 80D. The deduction is allowed only for premiums paid through digital modes or by cheque.
  • Default in Premium Payments During a Financial Year: If there is a default in paying the health insurance premium during the financial year, no deduction will be allowed under Section 80D for that year.
  • Premium Paid by the Employer for Group Health Insurance: If your employer pays the premium for a group health insurance policy covering you and your family members, you cannot claim a deduction for the amount paid by the employer. The tax benefit is available only for the premiums paid by you.
  • Premium Paid on Account of Working or Employed Children or Other Relatives: The deduction under Section 80D is available only for health insurance premiums paid for self, spouse, dependent children, and parents. Premiums paid for working or employed children, uncles, aunts, grandparents, or siblings are not eligible for tax benefits under this section.

It's essential to be aware of these exclusions and ensure that you meet the eligibility criteria for claiming deductions under Section 80D while filing your income tax return.

Things to Remember When Availing Tax Deductions Under Section 80D

When availing tax deductions under Section 80D of the Indian Income Tax Act for premiums paid on health insurance policies, it's important to keep several key considerations in mind. Here are some things to remember:

Understand Eligibility Criteria:

  • Ensure you meet the eligibility criteria for claiming deductions under Section 80D. This deduction is available to individuals and Hindu Undivided Families (HUFs).

Differentiate Between Premiums:

  • Understand the distinction between premiums paid for your own health insurance, your family's health insurance, and premiums for your parents' health insurance. Different sub-limits and deductions apply to each category.

Maintain Documentation:

  • Keep thorough records of all health insurance premium payments. You will need to provide proof of these payments when filing your tax returns.

Check Deduction Limits:

  • Be aware of the maximum deduction limits applicable under Section 80D. Additional Deductions for Senior Citizens:
  • If you are a senior citizen (60 years or older), you may be eligible for higher deduction limits. Verify the latest limits applicable to senior citizens.

Claiming Deductions for Parents:

  • If you are claiming deductions for health insurance premiums paid for your parents, they should be dependent on you. Parents could be dependent or non-dependent, and different deduction limits apply in each case.

Check for Appropriate Policies:

  • Ensure that the health insurance policies you purchase meet the criteria specified by the Income Tax Act to qualify for deductions under Section 80D.

Section 80D at a Glance

Section 80D

Frequently Asked Questions

Q- Can a term insurance premium be claimed as a tax exemption under Section 80D?

Normally term insurance premiums do not qualify for tax exemption under section 80D. Still it depends on the nature of the term insurance policy you have taken.

Q- Can a son claim tax exemptions for his parents Medical Premium paid by him?

Yes, a son can claim for their parents medical premium as per section 80D.

Q- Does LIC premium payment for dependent parents come under section 80D?

No, Section 80D is for medical premiums and health insurance premium.

Q- Do I have to be the proposer of health insurance for myself to get a deduction from income tax u/s 80d?

Yes, taxpayers can claim a deduction under section 80D if they are making payments for medical and health insurance premiums.

Q- What is the limit of income tax deduction under section 80D?

The maximum limit u/s 80D is Rs. 25000 (in case senior citizen Rs. 50,000)and in case both assessee and parents are senior citizens, then the amount can be claimed up to INR 1,00,000.

Q- Does the GST paid along with health insurance premium eligible for tax deduction under 80D?

Yes, the whole amount paid will be available for deduction.

Q- Can I claim tax exemption under section 80D if I have cashless medical insurance provided by my company?

Yes, provided your company includes that premium paid into your CTC

Q- I have not taken any Mediclaim policy, but I incurred preventive health check-up expenses for myself and my spouse of Rs 10000. What is the amount of deduction I can claim under section 80D?

Section 80D allows you to claim a deduction for health checkups taken for spouses, parents, and dependent children up to Rs 5000.

Q- Can health insurance premiums be used for tax saving under 80D even if the employer reimburses the premium paid?

No, it will not be an expense for the employee if reimbursed by the employer.

Q- I got medical treatment from outside the country can I still claim a deduction under section 80D?

The expenditure on medical treatment outside the country can also be claimed u/s 80D as there is nothing specifically mentioned in the Act in respect of medical expenditure

Q- Can I avail tax benefits for more than one health insurance policy?

Yes, the benefit of more than one insurance policy are allowed but subject to the maximum limit.

Q- How to claim the tax benefit of section 80D?

For claiming tax benefits filing of ITR is mandatory. When filing ITR you need to disclose the 80D deduction under “Deduction under chapter VI-A”.

Q- What is a preventive health check-up?

Preventive health check-up has not been defined under the law, so we can interpret it in general terms to be an expenditure done for diagnosing, safeguarding, and minimizing the effect of the illness.

CA Abhishek Soni
CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.