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Section 80D: Understanding Mediclaim Deductions | Tax Benefits Explained

Learn about Section 80D and how it offers deductions for mediclaim premiums, and eligibility criteria.

Section 80D - Deduction of Mediclaim


Still, in 2024, most people in India do not have health insurance because they believe that paying hectic medical bills would be easier than investing a bare minimum amount in Mediclaim.

 

To encourage more and more individuals to buy health insurance, the Indian government introduced tax exemptions under Section 80D of the Income Tax Act of 1961.

 

Let’s learn about  Section 80D! 


What is Section 80D of the Income Tax Act?

Section 80D of the IT Act allows taxpayers to claim deductions on payments made towards health insurance premiums.


Who is Eligible to Claim Tax Deduction Under Section 80D?

The following entities are eligible to claim tax deductions under section 80D.

●     Individuals

●     Hindu Undivided Families (HUFs)

●     NRIs who pay tax in India


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What deductions are allowed u/s 80D?

The following tax deductions can be claimed u/s 80D.

 

●     Preventive health check-up payments.

●     Health insurance premiums paid for oneself, spouse, children, and parents.

●     Senior citizens medical expenses who don’t have health insurance.

●     Contributions to government health insurance schemes.


Tax Deductions Under Section 80D

Eligible Entity

Deduction Amount(In rs.)

 

Age below 60 years

Age above 60 years

Self, Children, Spouse

25,000

50,000

Parents

25,000

50,000

Maximum Deduction

50,000

1,00,000

Preventive Healthcare (Optional)    

5,000

5,000

Payment Modes under Section 80D

Tax Deduction Type

Payment Mode

Health insurance premiums

All modes of payment other than cash

Preventive health check-up

All modes of payment

 

What are Preventive Health Check-ups u/s 80D?

Preventive health check-ups, introduced as a tax benefit in FY 2013-14 under Section 80D, involve regular medical examinations aimed at early detection of illnesses and risk factors reduction.

 

Taxpayers can claim this deduction for payments made towards preventive health check-ups for themselves, spouses, children, and parents.

 

According to Section 80D, individuals can avail a tax deduction of up to ₹5,000 per financial year for preventive health check-ups. However, it's important to note that this deduction is part of the overall Section 80D limit.


Important Points to Remember While Availing Section 80D Deductions

●     You’ll not be eligible for Section 80D deductions if health insurance premiums are paid in cash.

 

●     While buying a health insurance policy, carefully review the tax exemptions to avoid any mistakes in the future.

 

●     Medical insurance premiums paid by the employer or company are not eligible for deductions u/s 80D.

 

●     Always keep an eye on the latest tax laws related to health insurance as they change frequently.


Frequently Asked Questions (FAQs)


1.     How much tax exemption is allowed under Section 80D?

Tax exemption of up to Rs. 25,000 can be redeemed under Section 80D for self & family (under age 60). For age 60+, a tax rebate of up to ₹50,000 can be claimed.


2.     Is it possible to claim deductions under both 80C and 80D sections?

Absolutely, yes! You are allowed to claim deductions under both 80C and 80D sections.


3.     What are some of the exclusions under Section 80D?

Under Section 80D of the Income Tax Act, certain exclusions apply, including:

●     Premiums not paid within the financial year

●     Employer-paid premiums

●     Premiums paid in cash

●     Premium payments on account of siblings, grandparents, working children, and other relatives.


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