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Section 80D: Deduction In Respect Of Medical Insurance Premia

Updated: 13 hours ago


Section 80D: Deduction In Respect Of Medical Insurance Premia

 

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Very often, tax planners recommend obtaining health insurance while planning the taxes for their clients. Obtaining health insurance is considered as the top-most priority of an earning individual rather than anything else. Reason being, it helps provide adequate health insurance coverage to oneself, and the family. What’s more? The premium paid towards the health insurance reduces the tax burden of the individual thereby helping to save taxes.


However, this deduction cannot be availed if an individual opts for the New Tax Regime in a financial year. Here’s everything one needs to know about claiming deduction under Section 80D for reducing the tax burden.


Section 80D

Section 80D of the Income Tax Act, 1961, allows the individuals and Hindu Undivided Families (HUFs) to claim tax deductions of up to INR 25,000 for health insurance premiums paid towards oneself, spouse, parents, and dependent children. The deduction of INR 25,000 is increased to INR 50,000 in case of senior citizens aged 60 and above. A maximum deduction of INR 1,00,000 can be claimed under Section 80D.


Who can claim Deduction under Section 80D?

Deduction under Section 80D is allowed only to individuals and Hindu Undivided Families (HUFs). Thereby, partnership firms, trusts, corporations, and others are kept outside the purview of Section 80D. Moreover, only payments for health insurance premium and healthcare of senior citizens are covered under the said section.


Which Deductions are allowed under Section 80D?

Section 80D primarily allows for two types of deductions. It includes the amount spent on health insurance premiums and the costs of healthcare for parents and other family members. The deductions under Section 80D is presented in the tabulated form below:


Table of Deductions are allowed under Section 80D - Taxbuddy


Illustration of Total Deduction under Section 80D

The below table is an example of total deductions allowed under Section 80D of the Act: