Deductions Under Section 80CCD of Income Tax Act
November 21, 2017
Section 80DD: Deduction on medical expenses of disabled dependent
November 22, 2017

What is Deduction under Section 80D of the Income Tax Act?

Last Update Date : August 10, 2018

deductions under section 80d

Today, changes in global climate and unhealthy lifestyle has made us very vulnerable to various kinds of diseases. Therefore, a good health insurance has become a necessity for every common man. A medical insurance can make you financially prepared for any medical emergency plus it comes with added tax benefits. As a taxpayer, if you have incurred expenses towards medical insurance, preventive health checkup and other medical expenses, then you can claim tax deductions u/s 80D. You can get an income tax deduction tax up to Rs. 60,000 under section 80D.

Eligibility for Tax Benefits u/s 80D

You can avail the tax deduction under section 80D if you have paid any premium on mediclaim policy under section 80D taken for:

  • Yourself
  • Your spouse
  • Dependent children
  • Your parents (parents need not be dependent on you)

Maximum Deduction Limit u/s 80D for AY 2018-19

You can also claim tax deduction maximum up to Rs. 5,000 for your expenses on preventive health check-up within the overall limit of Rs. 60,000.

Types of Deduction

There are four different types of deductions that you can claim u/s 80D. They are:

  • Tax deduction on health insurance premium paid for you & your family
  • Tax deduction on health insurance premium paid for your parents
  • Tax deduction on preventive health checkup expenses
  • Tax deduction on medical expenses of super senior citizens

Tax Deduction on Health Insurance Premium Paid for Your Family:

  • If you pay premium for health insurance taken for you and your family then you can claim tax deduction under section 80D
  • You can claim deduction up to Rs. 25,000 for A.Y. 2017-18.
  • Deductions for senior citizen u/s 80D are higher. If you are a senior citizen then you can claim deduction up to Rs. 30,000 for A.Y. 2017-18.

Tax Deduction on Health Insurance Premium Paid for Your Parents:

  • In addition to the above mentioned deduction, you can also claim tax deduction if you pay premium for your parents’ medical insurance u/s 80D.
  • You can claim deduction up to Rs. 25,000 for A.Y. 2017-18.
  • However, if your parents are senior citizens, you can claim deduction up to Rs. 30,000 for A.Y. 2017-18.

Tax Deduction on Preventive Health Check-up Expenses u/s 80D:

There is another tax benefit available u/s 80D which can be claimed up to Rs. 5,000 if you have incurred expenses on health check-up of your family, parents and yourself.

  • The quantum of this deduction is up to Rs. 5,000.
  • However, this deduction of Rs. 5,000 is not in addition to the maximum deduction of Rs. 60,000 / Rs. 40,000 stated above but is included in the above deduction.
  • It is important to note that Rs. 5,000 is the maximum total deduction allowed for preventive health check-up.

Tax Deduction on Medical Expenses of Super Senior Citizens Having no Mediclaim Policy

If you or any member of your family or either of your parents is a super senior citizen (i.e. 80 years or above in age) but is not covered by any health insurance, you can still get a tax deduction.

  • The condition is that you took care of their medical expenses.
  • The amount that you can claim as tax deduction is up to Rs. 30,000.

Summary of Deductions u/s 80D for Assessment Year 2018-19 (FY 17-18)

The tax deductions discussed above have been summarized in the table given below:

 

Deductions under section 80D
Situations based on age Eligible deduction limits (up to Rs.) Total eligible deduction limit under section 80D (up to Rs.) (including Rs. 5,000 on preventive health checkup)
Medical Insurance Premium paid in respect of
Medical Insurance Premium paid in respect of Parents (whether dependent or not)
No one has attained age of 60 Years 25,000 25,000 50,000
You and your family is less than 60 years & Parents are above 60 years of age 25,000 30,000 55,000
You and your parents have attained the age of 60 years and above 30,000 30,000 60,000

Note: To claim deduction under this section health insurance premium should always be paid by any mode other than cash but medical or preventive health check-up expenses can be paid in cash.

The tax deduction currently allowed is up to Rs. 30,000 of the insurance covers you, your spouse or your children. You can get additional deduction of Rs. 30,000 on premium paid if you have a medical cover for your parents aged 60 years and above. If they are aged below 60 years, then the tax deduction cannot exceed Rs. 25,000.

However, if anyone of you, your spouse or your parents is not covered under any insurance policy, then you can claim a tax deduction up to Rs. 30,000 for the medical expenses incurred on them. Union budget for 2018 has extended this benefit to senior citizens as well and increased the deduction limit from Rs. 30,000 to Rs. 50,000.

A summary of deduction allowed under section 80D for AY 2019-20 is explained in the table below:

Nature of amount spent Family Member Parents
Age below 60 years(value in Rs) Age above 60 years(value in Rs) Age below 60 years(value in Rs) Age above 60 years(value in Rs)
A) Medical Insurance 25,000 50,000 25,000 50,000
B) Central Govt Health Scheme 25,000 50,000
C) Health Check-up* 5,000 5,000 5,000 5,000
D) Medical Expenditure 50,000 50,000
Maximum deduction 25,000 50,000 25,000 50,000

Calculation of Tax Deduction under Section 80D

Example: Mr Akash is 62 years old. He has a medical insurance policy on his name for which he pays a premium of Rs. 36,000 annually. He also pay premiums amounting to Rs. 28,000 annually for the health insurance policy of his parents who are above 80 years of age. How much tax deduction can he get under section 80D?

Solution: Since he is a senior citizen (above 60 years), he can get a deduction of up to Rs. 30,000 only for paying premium amounting to Rs. 36,000 since the maximum deduction limit is Rs. 30,000.

His parents are super senior citizens and therefore he is eligible for a tax deduction of Rs 28,000 out of the maximum possible deduction of Rs. 30,000 since the premium paid is only Rs. 28,000.

So, the total deduction that he can claim is (Rs. 30,000 + Rs. 28,000) Rs. 58,000.

Frequently Asked Questions

 

1) What if my wife and parents are not dependent on me? Can I still claim a deduction if I pay premiums for their health insurance?

Answer: Yes, you can claim a deduction in this case. This deduction is available to those who pay health insurance premium members of their family irrespective of whether the members are dependent on the person or not.

2) Can health check-up expenses be claimed separately for each dependent?

Answer: The answer is no because you can only claim Rs 5,000 in a year for these expenses whether for single dependent or multiple dependents. This deduction cannot be claimed per person basis but as an aggregate.

For e.g., If a person pays any amount on preventive health check-up (for himself + spouse & dependent children + parents), the gross total deduction allowed would not be more than Rs 5,000.

Just like section 80D, there are several other tax saving provisions covered under the Income Tax Act, but you might fail to claim the tax benefits in the absence of proper knowledge and procedures. So, you should take help of tax experts for this job. Saving taxes and filing income tax return accurately becomes very easy when you have professional help. This is where we come into the picture. You can visit any of our retail offices to get your taxes filed and avail year-round support in tax related matters.

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