Medical emergencies come without warning and the mental stress during this time is often increased by the bills that accompany treatment. One way to cover unforeseen medical costs is by getting health insurance.
The government of India has also introduced medical expense tax deductions to encourage people to purchase health insurance policies. Tax deductions for healthcare costs fall under Section 80D, and you can reduce your liability by taking full advantage.
What is Section 80D?
You can save tax on the money you spend on health insurance with deductions available under Section 80D. Medical expense tax deductions are applicable for both top-up health plans and critical illness plans.
Every individual and Hindu Undivided Family (HUF) can claim this deduction. This tax benefit is available over and above the deductions available under Section 80C. Note that you can claim this benefit only under the old tax regime.
Eligibility Criteria for Section 80D
According to the Income Tax Act 1961
Only individuals and HUF are eligible for the deduction can claim under Section 80D
A Non-Resident Indian (NRI) who pays taxes in India can also claim this deduction However, firms and organisations or any other entity can’t claim a deduction on medical insurance premiums paid.
You can claim a deduction for medical insurance premiums paid for yourself, your spouse, dependent children, and parents
Medical expenses for senior citizens are also eligible for deduction
Limit of Deductions for Different Scenarios Under Section 80D
Under Section 80D, you can claim a deduction of ₹25,000 in a financial year for medical insurance premiums. For senior citizens, this limit increases to ₹50,000. The table below summarises the deduction amounts available under different scenarios:
| Scenarios | Self and Family | Parents | Maximum Deduction |
|---|
| Self and family (below 60 years) and parents (above 60 years) | ₹25,000 | ₹50,000 | ₹75,000 |
| Self and family under 60 years old | ₹25,000 | - | ₹25,000 |
| Self, family, and parents under 60 years old | ₹25,000 | ₹25,000 | ₹50,000 |
| Self, family, and parents above 60 years | ₹50,000 | ₹50,000 | ₹1 lakh |
| HUF under 60 years | ₹25,000 | ₹25,000 | ₹50,000 |
| HUF above 60 years | ₹50,000 | ₹50,000 | ₹50,000 |
Payment Methods Under Section 80D
There are some specified modes to make payments under section 80D:
For preventive health check-ups, you can use any mode
For medical insurance premiums, you can use any mode other than cash
Cash payments are not allowed as deductions for medical expenses either
Key Takeaways:
Individuals and Hindu Undivided Families (HUFs) can claim deductions on health insurance premiums and medical expenses under the old tax regime.
Maximum deductions range from ₹25,000 to ₹1 lakh, depending on age and whether the insurance is for self, family, or senior citizen parents.
Cash payments are not eligible for deductions, except for preventive health check-ups. Premiums must be paid via non-cash modes.
Frequently Asked Questions
1. What is the maximum deduction under section 80D?
The amount depends on the type of insurance you have:
Self, spouse, and children: ₹25,000
Including parents (below 60): ₹50,000
Including parents (above 60): ₹75,000
If self/spouse are senior citizens: ₹1 lakh
Bonus: Senior citizen medical expenses: up to ₹50,000 (conditions apply)
2. How to Claim a Deduction Under Section 80D?
Salaried individuals can claim the 80D deduction by submitting insurance premium receipts or medical bills to their employer. Alternatively, you can claim it while filing the income tax return (ITR).
3. What are the documents needed for claiming medical expenses on taxes?
Salaried: Submit the health check-up invoice to your employer during the investment declaration
Self-employed: You don’t need to submit any document while filing ITR, but keeping payment proof for records is advisable
