What is Deduction under section 80D?
Section 80D of the Income Tax Act allows a deduction to an Individual or 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 Under Section 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, the finance minister increased the limit of deduction available to a senior citizen from INR 30,000 to 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 | INR 25,000 on Premium | INR 25,000 | ||
| INR 5,000 on Health Checkup | ||||
| Spouse, Self & Children + Parents | INR (25,000 + 25,000) = INR 50,000 on Premium | INR 50,000 | ||
| INR 5,000 on Health Checkup | ||||
| Self, spouse & Children + Senior citizen parents | INR 25,000 + INR 50,000 = INR 75,000 on Premium | INR 75,000 | ||
| INR 5,000 on Health Checkup | ||||
| Spouse, Self & children (senior citizen) + Senior citizen parents | INR (50,000 + 50,000) = INR 1,00,000 on Premium | INR 1,00,000 | ||
| INR 5,000 on Health Checkup | ||||
| HUF member | INR 25,000 on Premium | INR 25,000 | ||
| NA | ||||
| HUF member (Senior Citizen) | INR 50,000 on Premium | INR 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.
Solution
Dev is eligible for a deduction of INR 75,000, that is, INR 25,000 for his family and INR 50,000 for his senior citizen parents. Here Dev can claim medical premium and medical expenditure both in his parent’s case.
ITR Form Applicable for Section 80D
The taxpayer can claim deductions u/s 80D while filing ITR if all the above-mentioned conditions are full-filled. Individuals/HUFs can claim 80D in any of the ITR forms, i.e, ITR 1, ITR 2, ITR 3, and ITR 4 depending upon their income sources. The due date for filing ITR is 31st July of the next FY if the tax audit is not applicable.
Supporting Documents
Along with the common documents required to pay income tax like Form 16, PAN, etc, the taxpayers can provide documents of medical expenditures such as Medical Insurance Premium Receipt or Preventive Health Check-Up.
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.
Hey @sushil_verma
There are a wide range of deductions that you can claim. Apart from Section 80C tax deductions, you could claim deductions up to INR 25,000 (INR 50,000 for Senior Citizens) buying Mediclaim u/s 80D. You can claim a deduction of INR 50,000 on home loan interest under Section 80EE.
Hey @Dia_malhotra , there are many deductions that you can avail of. Your salary package may include different allowances like House Rent Allowance (HRA), conveyance, transport allowance, medical reimbursement, etc. Additionally, some of these allowances are exempt up to a certain limit under section 10 of the Income Tax Act.
For eg,
Tax on employment and entertainment allowance will also be allowed as a deduction from the salary income. Employment tax is deducted from your salary by your employer and then it is deposited to the state government.
The benefit Section 80EEB can be claimed by individuals only. An individual taxpayer can claim interest on loan of an electric vehicle of up to INR 1.5 lacs u/s 80EEB. However, if the electric vehicle is used for the purpose of business, the vehicle should be reported as an asset, loan should be reported as a liability and the interest on loan can be claimed as a business expense irrespective of the amount. (We have updated the article with the changes).
Thus, if you have a proprietorship business, you should claim interest amount as a business expense only if the vehicle is used for business purpose. However, if it is used for personal purpose, you can claim deduction of interest u/s 80EEB in your ITR since you would be reporting both personal and business income in the ITR (under your PAN).
As per the Income Tax Act, the deduction under Section 80EEB is applicable from 1st April 2020 i.e. FY 2020-21.
Hey @Sharath_thomas , we have updated the content according to the appropriate assessment year. Thanks for the feedback.
No issues. You’re welcome!
Hey @shindeonkar95
In case of capital gain income (LTCG/STCG), transfer expenses are allowed as deduction, except STT.
However, in case of business income (F&O, intraday), all expenses incurred for the business (including STT) are eligible to claim deduction in ITR.
Hope, it helps!
Hello,
Is it possible to claim deductions under S. 80CCF for Infra bonds bought in the secondary market and held to maturity?
There were a number of 10 year infra bonds issued in the 2010- 2013 period, which will start maturing soon. These are all listed on the exchanges (although hardly any liquidity or transactions in them). If I were to buy some of these bonds in the open markets and hold them in my demat to maturity (<3 years), is it possible to claim tax deductions (upto 20k per year) under 80CCF for buying?
I couldn’t find anything on this. Any help is appreciated.
Hello @Veejayy,
Yes you can claim deduction under 80CCF for investment made in specified infrastructure and other tax saving bonds bought in the secondary market and held to maturity.
Deduction under Section 80CCF can be availed only through investment in certain tax saving bonds, issued by banks or corporations after gaining permission from the government which shall be restricted upto 10,000 per year.
These bonds are generally long term bonds, having tenure of more than 5 years with a lock in period of 5 years in most of the cases. These bonds can be sold after the lock in period!
Also, interest earned on these bonds will be taxable.
Hope this helps!
Hi, I need to file my income tax for FY21, I am using Quicko platform for filing, I wanted to confirm if the ELSS investment amount for the FY21 is to be added in the section 80C, since I already the amount of Rs30,072 , should I add my ELSS amount to this existing amount and submit the total
Hey @Sheirsh_Saxena, yes, the investment amount needs to be added under 80C.