Income tax section 80D for medical insurance

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25 Jul 2023

Save on taxes while getting coverage for hospital-related expenses with Section 80D. Learn how you can claim a deduction & get new health insurance from Kotak General Insurance!

Having a medical insurance policy offers you dual benefits. On one hand, it allows you coverage against your hospital-related expenses, while on the other hand, it helps you save on taxes. To encourage and reward people for buying health insurance, the government has made provisions for tax exemption under Section 80D of the Income Tax Act. According to this, the premiums that you pay towards your health insurance plan in a financial year can be claimed.

Income tax section 80D

Section 80D allows individuals and HUFs, that is Hindu Undivided Families, to avail tax benefits from their total income against the premiums that are paid for a health insurance plan. You can claim a deduction if you are paying a premium for yourself, your spouse, your children (who are dependent on you), and your parents. Keep in mind that you can benefit from this exemption over and above the exemptions under Section 80C.

In order to promote people to stay conscious of their health and undergo routine health check-ups regularly, through Section 80D, the government also allows a deduction of up to INR 5,000 for a preventive health check-up.

To help understand Section 80D better, let us take a look at the following examples.

Who is eligible

Amount of premium paid for

 

Self/ family

Parents

Total Deductions

Individual and his/ her parents are below 60 years

INR 25,000

INR 25,000

INR 50,000

Individual and his/ her family who are below 60 years, but parents are over 60 years

INR 25,000

INR 50,000

INR 75,000

Individual and his/ her parents, are over 60 years

INR 50,000

INR 50,000

INR 1 Lakh

Example 1
Shashi Kumar is a 25 year old interior designer. Last year he purchased a medical insurance policy with a premium of INR 18,000. He also paid INR 4,000 towards a health check up that he got done the same year. He also covered his parents, who are both above 60 years of age in a health plan with INR 40,000. So, when filing his Income Tax Returns, Shashi would be able to claim INR 18,000 (his health insurance premium) + INR 4,000 (preventive check up) + INR 40,000 (parents’ premium), coming to a total of INR 62,000.

Example 2
Neeta Sinha, aged 32, has a health insurance plan which includes her husband, and her 5-year-old daughter. This year she paid INR 30,000 as the premium. She also paid a health insurance premium of INR 33,000 for her mother, aged 63. So, as per Section 80D, she can make a claim of only INR 25,000 for the premium paid towards the policy covering her, her spouse, and her dependent child. As her mother is a senior citizen, Neeta is eligible to make a claim of up to INR 50,000. So, she can get a total deduction of INR 33,000. Therefore, she would be able to get tax benefits of INR 58,000.

Conclusion
When you purchase medical insurance make sure you understand Section 80D which would help in making your policy all the more beneficial for you.

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Team Kotak GIC

The content of this blog has been created and carefully reviewed by the esteemed team at Kotak General Insurance, with the sole purpose of providing valuable guidance and sharing insights on the importance of general insurance. Our objective is to assist users in making informed decisions when purchasing or renewing insurance policies for their cars, bikes, and health. Our expertly curated information aims to empower our readers with the knowledge they need to protect their valuable assets and financial interests.