Understanding Section 80D of the Income Tax Act
Section 80D of the Income Tax Act provides tax deductions on premiums paid under health insurance, top up health plans or critical illness plans under the Old Tax Regime. These deductions can be claimed by any individual or HUF who have a valid health insurance plan.2
The tax benefits under the 80D section of the Income Tax Act can typically go up to ₹25,000 in every financial year, and if the policyholder is a senior citizen (above the age of 60 years), then tax deductions up to ₹50,000. Tax benefits of ₹1,00,000 are allowed in each financial year if you are a senior and are paying premiums for yourself as well as your parents above 60 years of age.2
Eligibility for deductions under 80D
Before we move ahead with the tax deductions that can claimed under the Income Tax Act Section 80D, let’s first understand who is eligible to claim tax deductions:2
- Individuals
- Hindu undivided family ( HUF )
Note: Only these two entities can claim deduction under section 80D of the Income Tax Act and no other entity is eligible.
An individual or HUF, can claim deductions under Section 80D of the Income Tax Act for insurance premiums paid for:2
- Self
- Spouse
- Dependent children
- Parents
Take a look at this table for a quick understanding of tax deductions under Section 80D of the Income Tax Act:2
Policy Holder
| Deductions for self and family
| Deductions for parents
| Preventive health check-ups
| Maximum deductions allowed
|
|---|
Self & Family
(below 60 years)
| ₹25,000
| N/A
| ₹5,000
| ₹25,000
|
Self & Family + Parents
(all of them below 60 years)
| ₹25,000
| ₹25,000
| ₹5,000
| ₹50,000
|
Self & Family (below 60 years)
+ Parents (above 60 years)
| ₹25,000
| ₹50,000
| ₹5,000
| ₹75,000
|
Self & Family + Parents
(above 60 years)
| ₹50,000
| ₹50,000
| ₹5,000
| ₹1,00,000
|
Members of HUF
(below 60 years)
| ₹25,000
| ₹25,000
| ₹5,000
| ₹25,000
|
Members of HUF
(a member is above 60 years)
| ₹50,000
| ₹50,000
| ₹5,000
| ₹50,000
|
What is the difference between Sections 80D, 80DD, 80DDB, and 80U?3
Similar to Section 80D are Section 80DD, Section 80DDB, and Section 80U of the Income Tax Act of 1961. To avoid any confusion, let's quickly understand the differences between these different sections. The table below will help you get into details:
Particulars
| Section 80D2
| Section 80DD
| Section 80DDB
| Section 80U
|
|---|
Purpose
| Section 80D provides tax benefits for medical expenses and health insurance premiums
| Section 80DD covers the tax benefit for medical treatment expenses of a disabled dependent
| Section 80DDB covers specific disease treatment expenses incurred by self or dependent spouse
| Section 80U provides a tax benefit for medical treatment expenses of disabled assesse
|
Maximum deduction limit
| The maximum tax benefit under Section 80D is ₹1,00,000
| Section 80DD provides a maximum tax benefit of ₹75,000 for non-severe disability and ₹1,25,000 for severe disability
| Section 80DDB offers a tax benefit equal to the expense or ₹40,000 for citizens and ₹1,00,000 for senior and super senior citizen, whichever is less
| Section 80U provides a maximum tax benefit of ₹75,000 for non-severe disability and ₹1,25,000 for severe disability.
Severe disability refers to a person with 80% or more disability and suffering from one or more specified disabilities.
|
Assesse of the section
| Individuals and HUFs are eligible for Section 80D tax benefit
| Resident individuals and HUFs are eligible for tax benefits under Section 80DD
| The tax benefits under Section 80DDB are extended to resident individuals and HUFs
| Only resident individuals who have been certified as a person with disability by medical authority are eligible to claim tax benefits under Section 80U
|
Tax saved in Section 80D
The tax deductions that an individual or HUF may claim under Section 80D of the Income Tax Act of 1961 range between ₹25,000 to ₹1,00,000. The tax benefits majorly depend on the age of the individual and their total medical-related expenses in a financial year. Here is a quick insight into the tax deduction limits under Section 80D:
● Individuals below 60 years of age2
Taxpayers in India below the age of 60 years can claim a maximum of ₹25,000 tax deductions under Section 80D of the Income Tax Act of 1961. The deductions can be claimed for health insurance premiums paid for the policyholder themselves, their spouse, dependent children and parents.
You can claim an additional amount of ₹25,000 tax deductions under Section 80D of the Income Tax Act of 1961 for health insurance premiums paid for dependent parents below the age of 60 years. The amount increases to ₹50,000 if either of your parents are more than 60 years of age.
● Older adults (above 60 years of age)2
Individuals above 60 years of age are also eligible for tax deductions under Section 80D of the Income Tax Act of 1961. The limit is higher than that for young adults. Older adults can claim a maximum of ₹50,000 for health insurance premiums in a financial year. So, if you are also more than 60 years of age and you pay health insurance premiums for yourself and your parents, then you can claim a total of ₹1,00,000 tax deductions under Section 80D of the Income Tax Act of 1961.
Here’s how Section 80D works
To make the deductions simpler for you, let’s take a simple example of a young and healthy 28-year-old from Delhi named Shekhar who opted for a health insurance plan for himself and another health insurance plan for his father, who is a senior citizen. He is paying a premium of ₹30,000 and ₹35,000 for each plan individually.2
Now, as per the provisions of section 80D of the Income Tax Act, Rahul can claim the following tax deductions:
- ₹25,000 tax deductions for premiums paid for his health insurance plan
- ₹35,000 tax deductions for premiums paid for his father’s
- Shekhar can claim a total of ₹60,000 tax deductions in one financial year.
Conclusion
The government of India has taken many initiatives to encourage individuals and HUFs to opt for health insurance plans. Having tax deductions is one such way of encouraging individuals to opt for health insurance plans.
Remember to carefully check the benefits and coverage of your health insurance plans to avail yourself of maximum advantages when raising claims and filing income tax returns.
Frequently asked questions
1. What is section 80D of the Income Tax Act?1
Section 80D of the Income Tax Act deals with tax deductions allowed for premiums paid against health insurance plans preventive health checkups and medical expenses , subject to provisions in the section. Any individual or HUF can claim the benefits under this section for themselves, their spouse, dependent children and parents.
2. What deductions are available under section 80D?1
Under section 80D of the Income Tax, you can claim tax deductions upto ₹25,000 in every financial year for health insurance premiums paid for yourself, your spouse and dependent children, and an additional amount of ₹25,000 for parents (₹50,000 if any one of the them are above the age of 60 years). If both you and your parents are more than 60 years of age, then the maximum amount of deduction that you can avail under section 80D is ₹1,00,000.
References
An ISO 9001:2015 
