Understanding Tax Deductions for Medical Insurance Premiums U/s 80D and taking care of your health is important not just for your well-being, but also for your finances. Section 80D of the Income Tax Act, of 1961, offers an attractive tax benefit to individuals and Hindu Undivided Families (HUFs) who invest in health insurance. This deduction can significantly reduce your tax liability while encouraging you to prioritize preventive healthcare.
Deduction u/s 80D is allowed to Individuals and HUF
Here's a breakdown of the key points about deductions under Section 80D:
Category | Age | Maximum Limit |
Self and Spouse and Children | All Below 60 Years | 25000 |
Self and Spouse and Children | Any One above 60 Years | 50000 |
Parents | All Below 60 Years | 25000 |
Parents | Any One above 60 Years | 50000 |
Section 80D Deduction For Individuals:
Deduction for Family: Up to Rs. 25,000 per year can be claimed for premiums paid towards health insurance for yourself, spouse, and your dependent children. This includes contributions to the Central Government Health Scheme or any other notified health insurance scheme. Limit will be increased to Rs 50,000 if any of the above family members are senior citizen.
Deduction for Parents: An additional deduction of up to Rs. 25,000 per year can be claimed for premiums paid towards health insurance for your parents. Limit will be increased to Rs 50,000 if any of the Parents are senior citizen
Senior Citizen Benefit: If any person covered under your policy is a senior citizen (aged 60 years or above), the deduction limit increases to Rs. 50,000.
Preventive Health Check-up: Up to Rs. 5,000 per year can be claimed for preventive health check-up expenses for yourself, your spouse, dependent children, or your parents. However, this deduction falls within the overall limit mentioned above i.e. Rs 25,000 or Rs 50,000 as the case may be.
Medical Expenditure Claim in Case of Senior Citizen: If a senior citizen cannot get health insurance, they can claim a deduction of up to Rs. 50,000 for any medical expenditure incurred, provided no health insurance premium was paid for them.
Mode of Payment: For claiming deduction under Section 80D, the payment should be made through non-cash modes like cheques, debit cards, or online payments (except for preventive health check-up expenses).
For Hindu Undivided Families (HUFs):
HUFs are eligible to claim a deduction of up to Rs. 25,000 per year for premiums paid towards health insurance for any member of the family.
The deduction limit increases to Rs. 50,000 if any member covered under the policy, is a senior citizen.
Similar to individuals, HUFs can also claim a deduction of up to Rs. 50,000 for medical expenses incurred on senior citizen members if no health insurance was purchased.
Additional Points:
● The premium should be paid from your taxable income.
● The health insurance scheme should be approved by the Insurance Regulatory and Development Authority (IRDAI).
● If you pay a lump sum premium for more than one year, the deduction will be allowed as an appropriate fraction of the lump sum amount in each relevant year.
● You
Conclusion
By understanding and utilizing the provisions of Section 80D, you can save significantly on your taxes while securing your health and well-being. Remember to keep all relevant documents like payment receipts and insurance policies readily available for tax filing purposes.