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Section 80D Income Tax Deduction for Medical Insurance, Expenditure & Preventive Health Check-Up
Limit amount, who can claim, tax benefit, example for calculation of deduction u/s 80D for FY 2020-21 (AY 2021-22)
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.
What is Sec 80D of income tax?
Sec 80D was introduced with an aim to promote health planning among individuals and HUF. Sec 80D provides deduction of expenditure on the :
- Medical insurance premium
- Contribution to CGHS(Central Govt Health Scheme)/notified scheme
- Preventive health check-up and
- Medical expenditure (in case of senior citizens).
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.
Who can claim deduction u/s 80D?
Section 80 D deduction can be claimed by :
- Individual(Indian/foreign citizen) for self, spouse, dependent children and parents(whether dependent or not).
- HUF for any of the members.
- NRI’s are also eligible for this deduction.
What is the amount of deduction under Sec 80D?
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.
A. Medical Insurance Premium : For Yourself & Your Family
- The maximum amount of deduction on policy taken for you & your family is Rs. 25,000/- .
- If you are a senior citizen(aged 60years or more) then the deduction amount will be Rs. 50,000/- .
Notes: For 80D Family means your spouse & dependent children.
B. Medical Insurance Premium: For Parents
- In addition to the above, you can claim deduction of 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 then the deduction amount will be Rs.50,000/-.
- Parents for 80D include father and mother(whether dependent or not). Father-in law and mother-in-law not included.
C. Preventive Health Check-Up Expenditure
- It is like a regular health check-up conducted once or twice every year by your physician or general practitioner .
- The cumulative amount of deduction for this check-up is maximum Rs. 5,000/- for yourself, your family and parents.Even cash payment for this expenditure is eligible for 80D deduction.
D. Deduction of Medical Expenditure on Senior Citizen (aged 60 & above)
- The expenditure is allowed for the deduction when no medical insurance is paid for the senior citizen. The term medical expenditure has not been defined under the income tax act but we can say 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 self and family for Rs.25,000.
- Any contribution for parents is not allowed for deduction.
*Preventive Health Check up is inclusive in overall limits
*Family includes spouse and dependent children
Example for calculation of deduction available u/s 80D
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 2019-20:
| 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 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 for HUF
- HUF can take medical insurance policy or incur medical expenditure on senior citizens in absence of any policy for any member of the family.
- 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 deduction for preventive health check-up.
Deduction on Single Premium Medical Insurance Policies
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.
- 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 exclusions under section 80D?
No deduction on the following amounts shall be allowed under section 80D:
- Premiums paid in cash (except for preventive health check ups)
- Premiums and expenses paid by a person other than the taxpayer.
What is the difference between sections 80D, 80DD, 80DDB and 80U?
| 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 |
Our Thoughts
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.
Section 80D at a Glance
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 this section. Still it depends on the nature of term insurance policy you have taken.
Q- Can a son claim tax exemptions on paying for parents mediclaim?
Yes, son can claim for parents mediclaim as per section 80D
Q- Does LIC premium payment of my dependent parents come under section 80D?
No, Sec.80D is for medical premium and for health insurances.
Q- Do I have to be the proposer of a health insurance for myself to get a deduction from income tax u/s 80d?
Yes, taxpayers can claim deduction under section 80D if making payment for the 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 upto INR 1,00,000.
Q- Does the GST paid along with LIC health insurance premium is 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 ups expenses for myself and spouse of Rs 10000. What is the amount of deduction I can claim under section 80D?
Section 80D allows you claim deduction for health checkup taken for spouse, parents and dependent children upto Rs 5000
Q- Can health insurance premium 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 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 of tax benefits for more than one health insurance policy?
Yes, the benefit of more than one insurance policies are allowed but subject to the maximum limit.
Q- How to claim tax benefit of section 80D?
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”.
Q- What is 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.
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