Health Insurance – Section 80D Income Tax Benefits

section 80D Tax Benefits

Section 80D of Income Tax allows you to claim income tax benefits. Let’s try to check out detail about Section 80D and Health Insurance.

Health-related problem or medical emergency can arise anytime. If you are not prepared to withstand health emergency, you will need to spend money from your pocket. Recently my friend was diagnosed with skin cancer. He was not covered with any health insurance. He spent hefty 2.3 Lakh from his pocket. His entire saving was spent on the treatment.

The learning from this example is one should always buy an adequate health insurance policy, which can help them in a health emergency. Our Government also encourage people to buy sufficient medical insurance policy. You can get tax benefits under Section 80 D for the premium paid for the health insurance policy.

Also Read – Top 5 Best Health Insurance in India 2019

What is Section 80 D?

Section 80D of Income-tax provide tax-related benefits to individual & HUF for the premium payment (other than cash) of health insurance. This benefit is available for the premium payment on the policy of Individual, family member – wife & dependent children. You can also avail tax benefit for the premium paid on the policy of parents. This tax benefit is over and above the deduction of Rs.1,50,000 under section 80C.

For better understanding, here is a list of people who will come under the benefit list.

  • Self
  • Spouse
  • Dependent Children (below 18 Years)
  • Parents

In addition to health insurance payment, you can also avail tax benefit on the preventive health checkup. This section also provides detail about the special deduction for senior citizen.

Section 80 D clearly specify that tax benefit will be extended only if health insurance payment is made via online banking, a cheque, demand draft, debit card or credit card. One can not claim tax benefit for the cash installment of premium or cash payment for a preventive health checkup.

How much Deduction available under Section 80D?

The deduction available to Individual under section 80D are given below.

  1. One can claim maximum Rs.25000 for the premium paid on the health insurance for self, spouse and children (under the age of 18 years).
  2. You can claim similar amount Rs.25000 for the premium amount paid for your parents father and mother.
  3. If your parents age is above 60 years (senior citizen) the limit will be increased to Rs.50000. This new enhancement is introduced in Financial Year 2018-19. (Announced n Budget 2018).
  4. In addition to above, you can also claim tax benefits for yearly health checkup. Section 80D also allows deduction for preventive health checkup. The deduction amount for this is Rs.5000. This deduction amount is in addition to deduction available on the premium payment.

Note – If you are paying medical insurance premium for your siblings, you can not avail tax deduction benefits on that amount.

Tax benefit limit under section 80D is given in below table.

Person CoveredExemption LimitTotal
Self & FamilyRs.25000Rs.25000
Self & Family + ParentsRs.25000 + Rs.25000Rs.50000
Self & Family + Sr. Citizen ParentsRs.25000 + Rs.50000Rs.75000
Self (Sr. Citizen) + Sr. CitizenRs.50000 + Rs.50000Rs.100000

Example for Tax Deduction Section 80D

Example 1 –

Suppose you pay a medical insurance premium of Rs.21000 for family floater health insurance policy. In addition to the above, you pay an additional premium of Rs.28000 on the health insurance premium of your parents.

In the above case, you will be allowed deduction of Rs.46,000 (Rs.21000+Rs.25000) provided your parents are not a senior citizen.

If your parents are senior citizen, you will be allowed deduction of Rs.49000 (Rs.21000+Rs.28000)

Example 2 –

Suppose you are 60 years old and paying a premium of Rs.34000 annually for health insurance of your family member and yourself. In addition to this, you are also paying a premium of Rs.39000 for your parents super senior citizen (80 years and above).

In the above case, you will be allowed full tax benefit of the amount paid as in this case you will get the benefit of Rs.50000 for yourself as well as for your parents. So total tax benefit would be Rs.73000 (Rs.34000+Rs.39000).

FAQs on Section 80D

 Q-1 Can I make cash payments for my health insurance policy and avail tax exemptions?

A-1 Tax Exemptions are limited to cheque, demand draft, debit card, and credit card transaction only. You can not avail tax benefit for the cash payments under section 80D.

Q-2 I am covered via group health insurance policy. This policy is provided by my employer. Can I avail tax deduction benefit for group health insurance?

A-2 You cannot claim tax benefit for group health insurance. however, if you have purchased individual health insurance in addition to group health insurance you can get tax benefits.

Q-3 My Parents are not dependent upon me can I claim tax benefit on their behalf?

A-3 Yes, you can avail tax benefit on your parents behalf (although your parents are not dependent) if you have made payment for health insurance payment.

Q-4 Can I avail tax benefits for more than one health insurance policy?

A-4 You can avail tax benefits for multiple health insurance policies. However, all other eligibility conditions to be met for section 80D.

Q-5 I have paid money for a preventive health checkup. Can I avail tax benefits?

A-5 You can avail tax benefit once in a year for the preventive health checkup done for yourself and your family member. The limit is Rs.5000. This limit is included in the above limit.

Over to you –

I hope you have got a complete understanding of Section 80D and tax benefits related to health insurance.

Do share your queries in the comment section.

Article by Raviraj

Raviraj is the man behind moneyexcel.com. He is graduate in finance, engaged in blogging since 7 years. Moneyexcel blog is ranked as one of the Top 10 Personal Finance Blog in India. He is not affiliated with any financial product, service provider, agent or broker. The purpose of this blog is to spread financial awareness and help people in achieving excellence for money. Please note that the views expressed on this Blog/Comments are clarifications meant for reference and guidance of the readers to explore further on the topics. These should not be construed as investment advice or legal opinion.

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