What is section 80D?
Section 80D of the Income Tax Act allows a deduction to an Individual or Hindu Undivided Family (HUF) for the amount paid towards medical insurance premium, medical expenditure, and preventive health checkup. Any amount paid to LIC or other insurers for medical insurance is covered under section 80D.
Who is eligible to claim a deduction from insurance premium u/s 80D?
In case of an individual, medical insurance premium, medical expenditure, and preventive health checkup expenses are eligible for a deduction if paid for:
- Self
- Spouse
- Children
- Parents
In the case of Hindu Undivided Family (HUF), a deduction is allowed for medical insurance premium paid for a member of HUF. You can claim this deduction at the time of filing ITR.
What is the insurance premium deduction limit under section 80D?
In budget 2018, finance minister increased the limit of deduction available to a senior citizen from Rs. 30,000 to Rs. 50,000. And within the overall limit, medical expenditures are allowed only to a senior citizen. Following table shows the overall limit of deduction available u/s 80D:
| Paid For | Deduction | Overall Limit | ||
|---|---|---|---|---|
| Self, spouse & Children | Rs. 25,000 on Premium | Rs. 25,000 | ||
| Rs. 5,000 on Health Checkup | ||||
| Self, spouse & Children + Parents | Rs. (25,000 + 25,000) = Rs. 50,000 on Premium | Rs. 50,000 | ||
| Rs. 5,000 on Health Checkup | ||||
| Self, spouse & Children + Senior citizen parents | Rs. (25,000 + Rs. 50,000) = Rs. 75,000 on Premium | Rs. 75,000 | ||
| Rs. 5,000 on Health Checkup | ||||
| Self, spouse & children (senior citizen) + Senior citizen parents | Rs. (50,000 + Rs. 50,000) = Rs. 1,00,000 on Premium | Rs. 1,00,000 | ||
| Rs. 5,000 on Health Checkup | ||||
| HUF member | Rs. 25,000 on Premium | Rs. 25,000 | ||
| NA | ||||
| HUF member (Senior Citizen) | Rs. 50,000 on Premium | Rs. 50,000 | ||
Example: Dev who is a non-senior citizen has taken a medical cover for his family and his senior citizen parents. He pays Rs. 32,000 for his medical coverage. And has paid Rs. 37,000 medical premium and Rs. 15,000 medical expenditure for his parents respectively.
Section 80D Deduction: Dev is eligible for a deduction of Rs. 75,000 i.e, Rs. 25,000 for his family and Rs. 50,000 for his senior citizen parents. Here Dev can claim medical premium and medical expenditure both in his parent’s case.
FAQs
No. Any mode other than cash will make you eligible to claim a deduction of medical insurance paid during the year. However, you can claim a deduction for any expenses incurred for preventive health checkup whether paid in cash or in any other mode.
No. As per the income tax act, deduction u/s 80D is allowed for any insurance premium paid for self, spouse, dependent children and parents. So if children are independent then any medical insurance premium paid for them will not be allowed deduction u/s 80D
You should keep medical insurance receipts as supporting document while claiming deduction u/s 80D. In the case where medical expenditures are incurred, the medical bill is sufficient.
