Income Tax Deduction for Medical Insurance: Understanding Section 80D
The changes in our lifestyles have made us vulnerable to different types of diseases. The cost of health care and medication is on the rise and could burn a hole in your pocket. Medical insurance will help you prepare for a medical emergency and will provide a cover for the expenses you incur on the same.
Understanding Section 80D will help you make the right investment decisions.
When you incur expenses for medical insurance in the form of premiums or medical expenses or preventive health check-up, you get a tax deduction as per Section 80D. This amount is limited to INR 60,000 in a financial year. You can also benefit from a deduction of INR 5,000 from the expenses incurred under a preventive health checkup.
Eligibility
A tax deduction can be availed as per Section 80D by you if you have paid a premium on the medi-claim policy for yourself, spouse, parents, and dependent children.
What are the different deductions you can benefit from?
There are four types of tax benefits, which you can enjoy. This is how understanding Section 80D would help you.
Deduction of tax on insurance premium paid for the family and parents.
You can get a deduction of an amount up to INR 25,000 for the insurance premium you pay for your family and an additional benefit of Rs 25,000 for the insurance premium you pay for your parents who are not senior citizens. In this case your total deduction under 80 D is Rs 50,000.
Deduction of tax on insurance premium paid for the family and senior citizen parents.
You can get a deduction of an amount up to INR 25,000 for the insurance premium you pay for your family and an additional benefit of Rs 30,000 for the insurance premium you pay for your parents who are senior citizens. In this case your total deduction under 80 D is Rs 55,000.
Deduction of tax on insurance premium paid for senior citizens
You can get a deduction of an amount up to INR 30,000 for the insurance premium you pay for your family incase the income tax assessee is a senior citizen and an additional benefit of Rs 30,000 for the insurance premium you pay for your parents who are senior citizens. In this case your total deduction under 80 D is Rs 60,000.
The Deductions allowed under section 80 D is described in the table.
| Description | Medical Insurance for family | Medical Insurance for Parents | Total Deductions under 80 D |
| Income Tax Assesse and parents are below 60 Years of age |
Rs 25,000 |
Rs 25,000 |
Rs 50,000 |
| Income Tax Assesse is below 60 years of age and parents are above 60 Years of age |
Rs 25,000 |
Rs 30,000 |
Rs 55,000 |
| Income Tax Assesse and parents are above 60 Years of age |
Rs 30,000 |
Rs 30,000 |
Rs 60,000 |
Deduction of tax on expenses incurred for a preventive health checkup
In case of any expenses incurred for a preventive health checkup for yourself or for your family, you can claim a deduction up to INR 5,000. You need to keep in mind that this deduction is not more than the above amount but is a part of the total limit.
Deduction of tax on medical expenses of super seniors who have no medi-claim policy
If one of your parents is a super senior citizen and has no medical insurance policy under their name, you can still get a deduction on the amount you pay for their expenses. You can claim a deduction of INR 30.000.
Thus, you can invest in a medical insurance policy and ensure that you benefit from the premium you pay. It will reduce your gross income and tax liability. More than that, the insurance will provide for your medical expenses and will ensure that you get the best treatment at all times.
Understanding Section 80D can help you make the right investment decisions for yourself and your family. You will be able to claim the maximum amount of deduction permissible while you get a preventive health checkup or have to be admitted into the hospital. You get the best healthcare and receive support from the insurance provider.
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