Looking to maximize your tax deductions beyond the Rs 1.5 lakh limit under Section 80C of the Income Tax Act? Section 80D is your solution! This section of the Income-tax Act, 1961, provides tax benefits for various healthcare expenses, under the old tax regime.
Under Section 80D, both individuals and Hindu Undivided Families (HUFs) can claim deductions for medical insurance premiums paid for themselves, their spouse, dependent children, and parents. This deduction also covers top-up health plans and critical illness plans, offering additional savings on top of the Rs 1.5 lakh limit of Section 80C.
It’s important to note that premiums paid for siblings, uncles, aunts, grandparents, or any other relative (excluding spouse, children, and parents) are not eligible for deduction under Section 80D. Similarly, premiums paid on behalf of working children do not qualify for this deduction.
If a medical insurance premium is co-paid by an individual and their parent, both can claim deductions based on their respective contributions. Remember to claim the deduction excluding any service tax and cess paid with the premium.
Please note that group health insurance premiums provided by employers are not covered under Section 80D. For tax-savvy individuals and HUFs, Section 80D offers a valuable avenue to save on healthcare expenses while optimizing tax benefits.”
Eligible Payments for Deduction:
Following are the Health Care related expenses which are eligible for claim of deduction under section 80D of Income Tax Act.
(i) Health Insurance Premiums:
Deduction up to Rs. 25,000 for premiums paid for self, spouse, dependent children, or parents.
If any family member or parent is a senior citizen (aged 60 years or above), the deduction goes up to Rs. 50,000.
Any mode of payment except cash payment is eligible for deduction.
(ii) Preventive Health Checkups:
Maximum deduction of Rs. 5,000 for health checkup expenses paid for self, spouse, dependent children, or parents. This includes all modes of payment, including cash.
All modes of payment including cash payment is eligible for this deduction.
(iii) Medical Expenses for Senior Citizens:
Senior citizens (aged 60 years or above) without health insurance can claim up to Rs. 50,000 as a deduction for medical expenses. This covers costs such as medical consultations, impairment aids, and medicines.
Any mode of payment except cash payment is eligible for deduction.
(iv) Contribution to CGHS/Notified Scheme:
Individuals can claim a tax deduction of up to Rs. 25,000 for contributions made to the Central Government Health Scheme (CGHS) or any other notified scheme.
Contributions made on behalf of parents, however, are not eligible for this deduction.
Any mode of payment except cash payment is eligible for deduction.
Refer the below given table for an easy understanding of these provisions.
|
Policy Holder
|
Deduction Limit | |||
| Self & Family | parents | Preventive Health Check-up | Overall Limit (All inclusive) | |
| Self & Family (Below 60 years) | Rs. 25000 | – | Rs.5000 | Rs.25000 |
| Self & Family (60 years & Above) | Rs.50000 | – | Rs.5000 | Rs. 50000 |
| Self & family with Parents (All below 60 years) | Rs. 25000 | Rs. 25000 | Rs.5000 | Rs. 50000 |
| Self & family (Below 60 years) with parents (60 years or above | Rs. 25000 | Rs.50000 | Rs.5000 | Rs.75000 |
| Self & family with Parents (All 60 years 0r Above) | Rs.50000 | Rs. 50000 | Rs.5000 | Rs. 100000 |
Note: Deduction for preventive check-up of up to Rs 5,000 will be within the overall limit of Rs 25,000/50,000. Family under this section includes only the spouse and dependent children.
Preventive Health Checkup:
Preventive health check-ups play a crucial role in maintaining overall well-being by detecting potential health issues at an early stage. These regular medical examinations are designed to identify illnesses early and mitigate risks, ultimately promoting a healthier lifestyle. In a bid to encourage citizens to prioritize their health, the government introduced the deduction for preventive health check-ups under Section 80D back in 2013-14.
Under Section 80D of the Income Tax Act, individuals can claim a deduction of up to Rs 5,000 for payments made towards preventive health check-ups. This deduction is part of the overall limit of Rs 25,000 or Rs 50,000, depending on whether the individual or their family members are senior citizens.
This tax benefit extends to payments made for preventive health check-ups for oneself, spouse, children, and parents. It’s worth noting that even payments made in cash for these health check-ups are eligible for this deduction.
Medical Expenses for Senior Citizens:
For senior citizens aged 60 years or above who do not have health insurance coverage, there’s a valuable tax deduction available on their medical expenses. Under the provisions of Section 80D of the Income Tax Act, these individuals can claim a deduction of up to Rs. 50,000 on the medical expenses they incur.
An important amendment to the Income-tax Act, starting from the financial year 2018-19, allows senior citizens or individuals incurring medical expenses for their senior citizen parents to claim a deduction based on the medical bills they have incurred. This means that if you are a senior citizen or if you have elderly parents who are also senior citizens without health insurance, you can claim this deduction on the basis of the actual medical expenses.
To Access the Income Tax Circular No.2/2024 Dated 5 March 2024 CLICK HERE
To Know the Income Tax Benefits on Child Education Expenses CLICK HERE
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