Section 80D Of Income Tax Act

What Is Section 80D?

Any individual or Hindu Undivided Families (HUF) may deduct medical insurance premiums under section 80D for both critical illness and top-up health plans. Under Section 80D, the taxpayer is eligible to deduct expenses related to a health insurance plan for both himself and any eligible family members.

Eligibility Criteria For Deduction Under Section 80D

The following are the requirements to be eligible for a deduction under Section 80D:
Qualifications for individuals: Under the 80D section, taxpayers and Hindu Undivided Families (HUF) may file a claim for deductions.
Protection for the family: If you purchase health insurance for yourself, your spouse, or a dependant, you may be eligible to claim this deduction.
Policy for health insurance: The critical illness rider and other policy features are among the extra features that qualify for this deduction in addition to health insurance policies.
Upper Limit of Deduction: Maximum amount that can be deducted under Section 80D: Section 80D of the Income Tax Act allows for a deduction of up to Rs. 1 lakh. However, depending on the policyholder's age, these deductions may change:
Deduction for self, spouse and children below the age of 60:

• Deduction of Rs. 25,000 for the self, spouse, and under-60-year-old children
• Deduction: Rs. 25,000 for parents under 60
• Rs. 50,000 as a deduction for the individual, spouse, and any children above 60.
• Rs. 50,000 is the deduction for parents who are over 60.
• HUF members under 60: Rs. 25,000
• HUF members over 60: Rs. $50,000

Premium paid on behalf of working children cannot be taken for tax benefit.
The deduction must be taken without showing the service tax and cess portion from the premium amount.

Tax Benefits Under Section 80D

Senior Indian citizens are entitled to health insurance tax benefits under Section 80D of the Income Tax Act of 1961.If the elderly parent's children are responsible for covering the cost of their health insurance, the latter may make a claim for these benefits on behalf of the former. 
You are qualified for a tax deduction on insurance that you buy for yourself, your spouse, or your dependent children. You can deduct up to ₹ 25,000 under Section 80D for yourself and your family (or up to ₹ 50,000 if the insured is 60 years of age or older) and up to ₹ 25,000 (or up to ₹ 50,000 if the insured is 60 years of age or older) for your parents if you obtain health insurance. 
Furthermore, you qualify for an annual tax deduction of ₹ 5,000 for preventative healthcare for your family.
 

Overview of Deductions Available Under Section 80D

In a fiscal year, a deduction of ₹ 25,000 is permitted under Section 80D. The maximum deduction permitted for senior citizens is ₹ 50,000.
The amount of the deduction that an individual taxpayer is eligible for under different circumstances is shown in the table below:
 

What Is a Preventive Health Check-Up Under 80D?

The government started deducting annual preventative healthcare check-up’s in 2013–14 to motivate people to take a more proactive approach to their health. Through routine check-ups, preventive health check-ups seek to detect any sickness and reduce risk factors early on Family health coverage or Senior citizen healthcare too. A deduction of ₹ 5,000 is allowed under Section 80D for costs made for preventive medical examinations. This deduction will not exceed the overall cap of Rs 25,000 or Rs 50,000, depending on the situation. Individual may additionally deduct this amount for his parents, dependent children, spouse, or himself. Cash can be used to pay for health checkups that are preventative. For instance, in the fiscal year 2023–2024, Yogesh paid the ₹ 23,000 health insurance premium for his wife and dependent children. He was paid ₹ 5,000 and had a health examination performed on himself as well. 

He was paid ₹ 5,000 to have a health examination performed on himself as well.

Rahul is eligible to deduct up to ₹ 25,000 under the Income Tax Act's Section 80D. Amounts of ₹ 2,000 for a health examination and ₹ 23,000 towards the insurance premium paid have been approved. Due to the fact that the total deduction in this instance cannot exceed ₹ 25,000, the deduction for preventative health examinations has been limited to ₹ 2,000.

Multi-Year Health Insurance Premium Paid in Lump Sum

Occasionally, consumers purchase multi-year health insurance policies due to the available discounts. They pay the premium amount in advance in this instance. In that scenario, section 80D permits a proportionate deduction. This would, however, once more be subject to the previously mentioned Rs 25,000 and Rs 50,000 restrictions.

Example: Mr. A paid Rs 30,000 up front for a 2-year health insurance policy. In this instance, Mr. A is eligible to deduct Rs. 15,000 under Section 80D for each of the next two years.
 

What Is The Limit Of Deduction Under Section 80D?

In accordance with Section 80D, a taxpayer is eligible to deduct health insurance premiums paid for themselves, their families, and their parents in addition to medical check-up expenses. The following are the overall deduction limits:

Things To Be Remembered At The Time Of Purchase Of Medical Insurance For Claiming 80D Deduction

Before acquiring health insurance for 80d deduction, there are a few things to consider:
It is not possible to claim Section 80D tax exemption if you pay the premium on behalf of working children.
If you make premium payments or Mediclaim on behalf of your grandparents, uncles, aunts, siblings, or any other relative, you are not eligible to receive a tax deduction under Section 80D.
Should you and your parents have contributed a portion of your premiums, you are both eligible for Section 80D tax advantages.
Your work provides you with group medical health insurance, but you are not eligible to deduct the premiums from your taxes.
It will be necessary for you to deduct the service tax and cess payment from the total amount of the paying premium.
 

Conclusion

In India, the majority of individuals consider health insurance or Health expenditure to be an extra cost rather than a requirement. They depend on their money to cover unforeseen medical costs. The government adopted Section 80D income tax to encourage consumers to invest in health insurance. Under Section 80d income tax clause, people who purchase health insurance can receive tax benefits.