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Limit amount, who can claim, tax benefit, example for calculation of deduction u/s 80D for FY 2021-22 (AY 2022-23)
Don't be late to file taxes - File your ITR today. Know about different tax deductions on Medical Insurance. Section 80D of the Income Tax Act 1961, gives you the tax benefit on the premium paid for medical insurance policies. These policies can be taken for yourself or your family or parents. Not just this, the section also has a provision for allowing you the benefit of expenses made for preventive health check up amounting upto Rs 5000 in a financial year. Read below to know more insights about the limit of tax deduction, calculation and much more.
Sec 80D was introduced with an aim to promote health planning among individuals and HUF. Sec 80D provides deduction of expenditure on the :
The amount on deduction depends upon the type of expenditure, mode of payment and the age & relation of the person for whom expenditure has being done.
Section 80 D deduction can be claimed by :
For claiming the deduction under Section 80D the expenditure needs to be made in any mode other than cash. Although the expenditure on preventive health check-ups is allowed to be incurred in cash. The deduction for the following expenses are allowed under section 80D -
Type of Expense | Limit | |
---|---|---|
A. | Medical insurance premium paid for yourself & your family. | Rs. 25,000 Rs. 50,000(in case of senior citizen) |
B. | Medical insurance premium paid for your parents. | Rs. 25,000 Rs. 50,000(in case of senior citizen) |
C. | Expenditure on preventive health check-up. | Rs.5,000 |
D. | Medical expenditure of senior citizens or super senior citizens. | Rs.50,000 |
E. | 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) | Rs.25000+Rs.25000= Rs.50,000 Rs.50000+Rs.50000=Rs.1,00,000 Rs.25000+Rs.50000=Rs.75,000 |
Let’s start discussing all different situations one-by-one or you can simply get in touch with our eCAs.
Notes: For 80D Family means your spouse & dependent children.
*Preventive Health Check up is inclusive in overall limits
*Family includes spouse and dependent children
Ram(57 years) is a tax-payer. Other members of his family are -Sita(55 years ram wife), Lav and Kush (dependent children) and Parents. The following expenditure for incurred by Ram for FY 2021-22:
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 |
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 utilised, only 3000 can be claimed ) | 2000(maximum limit is 50000 since 47,000 utilised, remaining 3000. However, preventive health check-up has an overall limit of 5000 out of which 3000 used for self and family so only 2000 can be claimed now) |
Total 80D deduction that can be claimed by Ram is Rs. 74,000 | 25000 | 49000 |
Notes : *The amount of deduction u/s 80D will remain the same for the FY 2019-20 & FY 2020-21 (old income tax slab).
Deduction under section 80D can be claimed for a single premium paid towards your medical insurance policy. In such policies one time lump sum payment is made against the regular installment for the complete policy tenure. Since the payment is one time payment, deduction will be allowed on proportionate basis.
No deduction on the following amounts shall be allowed under section 80D:
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) | 75,000(non-severe disability) 1,25,000(severe disability) |
Type of assessee | Individual/HUF | Resident Individual/ HUF | Resident Individual/ HUF | Resident Individual |
A medical insurance policy is very important for each one of us.These policies provide a strong monetary support when you are in sudden requirement of huge amounts of money.
We hope our blog was able to clarify all your doubts on deduction for medical insurance.
If you have any further doubts, don’t forget to get in touch with our eCAs.. They are at your service 24×7.
Normally term insurance premiums do not qualify for tax exemption under this section. Still it depends on the nature of term insurance policy you have taken.
Yes, son can claim for parents mediclaim as per section 80D
No, Sec.80D is for medical premium and for health insurances.
Yes, taxpayers can claim deduction under section 80D if making payment for the insurance premiums.
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 upto INR 1,00,000.
Yes, the whole amount paid will be available for deduction
Yes, provided your company includes that premium paid into your CTC
Section 80D allows you claim deduction for health checkup taken for spouse, parents and dependent children upto Rs 5000
No, it will not be an expense for the employee if reimbursed by the employer.
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
Yes, the benefit of more than one insurance policies are allowed but subject to the maximum limit.
For claiming tax benefit filing of ITR is mandatory. At the time of filing ITR you need to disclose 80D deduction under “Deduction under chapter VI-A”.
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.
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