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How to get Tax deduction under 80D?

dateKnowledge Centre Team dateNovember 17, 2020 views78 Views 4 Minute Read

Introduction:

In the Indian taxation parlance, income tax exemptions are deductions or absolution given on the total income. This practice is nothing new. In fact, it goes as far as ancient times when Ashoka was ruling the Indian Mauryan empire. According to inscriptions , it is believed that income tax relief measures were in place for the people of Lumbini. They paid one-eighth of their total income as income tax instead of the usual one-sixth that the other people paid as taxes.

In the current scenario too, tax relief measures are in place in the form of tax exemptions and deductions. The Income Tax Act, 1961 provides for all such provisions and the annual budget announcement informs the taxpayers of any changes introduced. Under different sections, there are exemptions and deductions for a separate group of expenses or allocation. For example, Section 80D looks at health insurance and medical expenses. It provides guidelines on how your medical expenses, health check-up, health insurance, among other things can be claimed as expenses and the extent to which they can be available for deduction.

Tax deduction under section 80D:

Let us look in detail what exactly Section 80D provides the tax deduction for:

  • Health Insurance: Health insurance is a crucial component of any one’s financial plans. The logic is simple: medical emergencies can strike at any time and the rate of medical inflation in the country is high. So if there is a serious diagnosis or accident, seeking treatment for the same could severely impact your financial health. Therefore, we buy health insurance so that all such situations are provided for in light of emergencies, in return for a premium that you pay regularly for the policy. Under Section 80D of the Income Tax Act, 1961, you are allowed a deduction up to a maximum amount of Rs 25,000 in a year for the amount of premium you pay towards a health insurance policy.
    What does this mean? If you opt for the Health First Plan from Canara HSBC Oriental Bank of Commerce Life Insurance as your health insurance plan, you will have the freedom to choose the cover of your choice along with multiple customization options that best suit your needs. And whatever amount of premium you have paid can be claimed as a deduction from your income for the year. There are other allied expenses also allowed as a tax deduction under section 80D.
  • Deduction on preventive healthcare check-ups: People get preventive health check-ups on an annual basis, usually. This is just a regular check-up to keep a track of your vitals and get any routine tests if there are any possible symptoms for any ailment. In accordance with the provisions of tax deduction under section 80D, a deduction of Rs 25,000 is allowed, as already mentioned before. Out of this overall amount, Rs 5,000 can be the expenses spent towards such preventive health check-ups for yourself and your family. This would include your family - spouse, children, self and parents, but not your siblings.
  • Deductions on Health Insurance Premium Paid For Parents: A lot of questions arise when you pay the premium for policies meant to serve your parents. Since you are the one paying, it makes sense that you should also be allowed deductions for the same. There is provision for that too. If your parents are senior citizens, that is aged 60 years or more, then the deduction that can be claimed on their health insurance premium is Rs 50,000. But the deduction is capped at Rs 25,000 if you are paying the premium for parents younger than 60 years.

Summarily, here is how the deduction goes:

  • When you are paying health insurance and health check-up expenses for yourself, the income tax deduction allowed is capped at Rs 25,000. This includes health check up upto Rs 5000.
  • When you are paying medical expenses for yourself as well as your family and parents, then the income tax deduction allowed is capped at Rs 50,000 for both you as well as your family and parents,
  • In the same case as above, if your parents happen to be senior citizens, their premium deduction is at Rs 50,000. So the total cap is raised at Rs 75,000 for you as well as your family and your senior citizen parents.
  • If you are yourself a senior citizen and are also paying premium for parents, who are also senior citizens, then this cap in total is increased to Rs 100,000

Check your eligibility according to age and according to who all you are paying for, and plan your health expenditure accordingly for tax-saving purposes!


Hi, I am Ankit Sanghavi, I am a qualified Chartered Accountant and have been practicing since 2008. I am also a certified financial planner and regularly conduct seminars on tax audits, Value investment, GST implementation, and other topics. As a part of the tax series initiative by Canara HSBC Oriental Bank of Commerce Life insurance Company, I will be today taking up the topics of tax deductions; this video will help you assess your taxable income by saving money by savings in tax. To start with let's understand Section 80D.

Sec 80D is a section in the Income Tax Act which allows medical insurance payments to be claimed as a deduction from the gross total income of a taxpayer.

A deduction can be claimed on medical insurance payments made for self, spouse, dependent children & dependent parents.

The benefit is available to only Individuals & HUF - Partnership Firms, LLP, Trusts & Companies cannot avail deduction u/s 80D.

The maximum deduction that can be claimed by a taxpayer is Rs 25,000 (Rs 50,000 in case the taxpayer is a senior citizen). Further, a taxpayer can avail

additional deduction for medical insurance payments for their dependant parents.

Accordingly, if a taxpayer who is a non-senior citizen pays medical insurance for himself and his dependent non-senior citizen parents - the tax deduction that can be claimed is Rs 25000 + Rs 25000. In case dependant parents are senior citizens then the max deduction would be Rs 25000 + Rs 50000.

If the taxpayer and dependent parents both are senior citizens - the tax deduction would be Rs 50,000 + Rs 50000.

The above amount includes Rs 5000 for expenditure incurred on preventive health check-ups for self also.

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