• Invest
    Investment Suite
    Stocks
    Mutual Funds
    Future and Options
    IPO
    Exchange Traded Funds
    Commodity
    Stockcase (Stock Baskets)
    Currency
    Non Convertible Debentures
    Sovereign Gold Bond
    Exclusive
    NRI Account
    Private Client Group
    Features
    SipIt
    MTF
    Investment Suite
    Exclusive
    Features
  • Platform
    Product Suite
    Kotak Neo App & Web
    Nest Trading Terminal
    NEO Trade APIs
    Features and Tools
    MTF
    Securities Accepted as Collateral
    Margin Requirements
    Payoff Analyzer
    Calculators
    SIP Calculator
    Lumpsum Calculator
    Brokerage Calculator
    Margin Calculator
    MTF Calculator
    All Calculators
    Product Suite
    Features and Tools
    Calculators
  • Pricing
  • Research
    Research Calls
    Long Term calls
    Short Term calls
    Intraday calls
    Derivatives calls
    Pick of the week
    Top Monthly Picks
    Research Reports
    Fundamental Research Report
    Technical Research Report
    Derivative Research Report
    Research Calls
    Research Reports
  • Market
    Stocks
    Market Movers
    Large Cap
    Mid Cap
    Small Cap
    Indices
    Nifty 50
    Bank Nifty
    FinNifty
    Nifty Midcap India
    VIX
    All Indian Indices
    Mutual Funds
    SBI Mutual Funds
    HDFC Mutual Funds
    Axis Mutual Funds
    ICICI Prudential Mutual Funds
    Nippon India Mutual Funds
    All AMC's
    IPO
    Upcoming IPO
    Current IPO
    Closed IPO
    Recently Listed IPO
    Stocks
    Indices
    Mutual Funds
    IPO
  • Learn
    Resource
    Market Ready
    Kotak Insights
    Infographic
    Podcast
    Webinars
    Youtube Channel
    Quarterly Results
    Investing Guide
    Demat Account
    Trading Account
    Share Market
    Intraday Trading
    IPO
    Mutual Funds
    Commodities
    Currency
    Futures & Options
    Derivatives
    Margin Trading
    Events
    Budget 2024
    Muhurat Trading
    Share Market Holiday
    Market Outlook 2024
    Resource
    Investing Guide
    Events
  • Partner
    Business Associates
    Fund Expert
    Kotak Connect Plus
    Startup connect
  • Support
    FAQs
    Circulars
    Bulletins
    Contact Us
    Forms Download
    Get your Statement
​

Section 80D Deduction

  •  4m
  • 0•
  • 06 Feb 2023

Deductions Under Section 80D

Deductions under Section 80D are applicable when you buy or renew a medical insurance plan through the payment of premiums.

Some Conditions That You Should Meet:

You should pay the premium in any mode other than cash. The health insurance policy can cover the taxpayer and dependents. Dependents include parents, children and spouse.

In the case of HUFs or Hindu Undivided Families, it can be any member of the family.

The deduction can be claimed by individuals for the contribution made to Central Government Health Scheme or schemes notified by the Central Government.

You can also claim deductions for the cost of preventive health check of the family and expenditure incurred for the treatment of a senior citizen who is not insured.

  • Individual Taxpayer

If you are a resident Indian individual, you can claim the policy in your own name or in the name of your spouse, children, or parents.

  • HUF

For HUFs, the policy can be in the name of a member of the HUF.

1. For medical insurance covering the taxpayer, spouse and children aged below 60 years:

A deduction of up to Rs 25,000 is available under Section 80D for expenses towards health insurance. This applies to the income tax computation for FY 2019–20 and FY 2020-21. Please note that dependent children will not be covered by the deduction if they are employed. Male children who are unemployed after 18 years of age can be covered until they are 25 years and female children until they are married.

2. If the insured is a senior citizen:

The deduction available to senior citizens is Rs 50,000, and it applies to FY 2019–20 and FY 2020–21. The limit was earlier increased from Rs 30,000 to Rs 50,000 in Union Budget 2018. The reasoning behind the increase was the higher cost of medical insurance with respect to the elderly.

3. If the taxpayer is paying for insurance cover for parents under 60:

A taxpayer who is paying for the medical insurance of parents aged less than 60 years can claim up to Rs 25,000 as additional deduction under Section 80D. This is irrespective of whether the parents are dependents or not.

4. If parents are senior citizens:

An individual paying the medical bills and insurance premium of senior citizen parents can claim a deduction of Rs 50,000.

5. If taxpayer and parents are all above 60 years of age:

If the taxpayer and their parents are over 60, they can together claim Rs 1,00,000 lakh as deductions.

6. Deductions for preventive health check-up under section 80D:

Since FY 2015–16, a deduction of Rs 5,000 is allowed for the preventive health check-up of individuals. This applies to FY 2019–20 and FY 2020–21. Keep in mind that this deduction is within the limits specified above. It is a cumulative deduction applicable to the taxpayer and their dependents and does not apply on a per-person basis.

7. Deductions for super senior citizens under Section 80D:

Even though there are few medical insurers covering super senior citizens, Union Budget 2018 extended the deduction to Rs 50,000 for super senior citizens. This includes not only their health insurance premium but also any medical expenses incurred in case the individual is not covered by any policy.

8. Deductions for HUFs under Section 80D:

HUFs can claim up to Rs 25,000 as a deduction against the premium paid for health insurance of a member. This amount will be increased to Rs 50,000 if:

  • Premium is paid for medical cover of a member of the HUF who is a senior citizen or
  • When medical expenditure is incurred for treating a senior citizen who is not covered by insurance.

Examples

  1. Anil, who is 45 years old, pays Rs 29,000 towards his own medical insurance. He also pays Rs 55,000 for the medical insurance of his parents who are 62 and 65 years of age respectively. How much can he claim in deductions under Section 80D? Since he is less than 60 years of age, Anil can claim Rs 25,000 as deductions for his own insurance. Additionally, he can claim Rs 50,000 for the insurance of his parents who are senior citizens. So, in total, Anil can claim Rs 75,000 as deductions under the section.

  2. What if out of the insurance cover of Rs 55,000, Anil’s father pays Rs 25,000 and the rest is borne by Anil? In that case, Anil can claim Rs 25,000 on the insurance premium of his father’s policy in addition to the Rs 25,000 he has claimed for his own medical cover and Anil’s father can claim Rs 25,000 paid by him.

  3. Sunita is 65 years old and pays Rs 50,000 as a premium for her medical insurance. Her insurance premium is high since she is a senior citizen. Sunita also pays Rs 60,000 for her 85-year-old mother’s health insurance. How much insurance premium can Sunita claim as deductions? She can claim a maximum deduction of Rs 50,000 for the premium on her own insurance and an additional deduction of Rs 50,000 for her senior citizen mother’s insurance cover.

A Mediclaim policy not only covers the cost of hospitalization and other expenses but also allows you to claim a deduction under Section 80D.

  1. Individuals can claim a maximum deduction of Rs 25,000 for Mediclaim premium paid for self, children and spouse.

  2. If the person insured is a senior citizen, the taxpayer paying the Mediclaim premium can claim a deduction of up to Rs 50,000. This deduction became applicable from FY 2018–19. The limit was increased from Rs 30,000 in Union Budget 2018.

  3. Up to Rs 25,000 of the Mediclaim premium paid for medical insurance of parents can be claimed as a deduction under Section 80D.

  4. If either or both the parents being insured are senior citizens, then the deduction limit available is Rs 50,000.

  5. The Mediclaim premium paid for the health cover of any member of an HUF is eligible for deduction of up to Rs 25,000. If the member of the HUF insured is a senior citizen, then the deduction limit is Rs 50,000. In other words, if you paid a premium cost of Rs 35,000 for the health cover of a member of HUF who is 65 years old, then you can claim a deduction of the entire premium when you file income tax returns for FY 2019–20 and FY 2020–21.

The Section 80D deduction provides substantial relief under the existing taxation regime. But are you thinking about going for the optional taxation regime that was introduced in Budget 2020? Keep in mind that this new regime waives the 80D deduction (along with other common exemptions and deductions). You will not be able to claim deductions on these expenses in that case.

Did you enjoy this article?

0 people liked this article.

What could we have done to make this article better?

Read Full Article >
Enjoy Free Demat Account Opening
+91 -

personImage
Enjoy Free Demat Account Opening
+91 -