Understanding Section 80D of the Income Tax Act

Understanding Section 80D of the Income Tax Act

Health is wealth but protecting it can also help you save on taxes. Section 80D of the Income Tax Act allows deductions on premiums paid for health insurance, making it a smart move for both your well-being and your financial situation. Whether you're insuring yourself, your family, or your parents, understanding how this section works can help you plan more effectively.

In this blog, we’ll break down the benefits, limits, and eligibility criteria under Section 80D.

Eligibility Criteria for Claiming Health Insurance Tax Benefits

 

To claim tax benefits under Section 80D, you need to meet certain eligibility criteria. Here's a quick look at the key conditions:

• Who can claim: Individuals and Hindu Undivided Families (HUFs).
• Who’s covered: Self, spouse, dependent children, and parents.
• Payment mode: Premium must be paid via non-cash methods, like card, net banking, or UPI.
• Policy requirement: The health insurance plan must be approved by IRDAI.
• Residency: This deduction is only available to Indian residents.

Meeting these conditions ensures your premiums qualify for tax deductions under Section 80D.

Deduction Limits under Section 80D

 

The deduction you can claim under Section 80D depends on who you're paying the premium for and their age. Here's a quick breakdown:

The total deduction allowed can go up to ₹1,00,000 in certain cases.

Deduction for Self, Spouse, and Dependent Children

• Individuals can claim up to ₹25,000 for premiums paid for themselves, their spouses, and dependent children.
• If the insured person is a senior citizen (60 years or older), the limit increases to ₹50,000.
• This also includes up to ₹5,000 for preventive health check-ups, within the overall limit.
• The premium must be paid through non-cash methods to be eligible.
• Children must be financially dependent to be eligible for coverage under this clause.

Deduction for Parents (Senior and Non-Senior Citizens)

• An additional deduction is available for premiums paid for parents’ health insurance.
• If parents are below 60 years of age, you can claim up to ₹25,000.
• If either parent is 60 years of age or above, the limit increases to ₹50,000.
• This is in addition to the deduction for self and family.
• Payment must be made in a non-cash mode, and parents do not need to be financially dependent.

Deduction for Hindu Undivided Families (HUFs)

• HUFs can claim deductions up to ₹25,000 for insuring any of their members.
• If the insured member is a senior citizen, the limit goes up to ₹50,000.
• Premiums must be paid from the HUF’s income and via non-cash methods.
• The deduction is allowed under Section 80D in the HUF’s income tax return.
• Preventive health check-ups (up to ₹5,000) are included in the overall limit.

Preventive Health Check-up Deductions

 

Section 80D also includes deductions for preventive health check-ups, encouraging regular medical screenings. You can claim up to ₹5,000 per financial year for health check-ups of yourself, your spouse, children, or parents. This amount is not over and above the deduction limits—it is included within the ₹25,000 or ₹50,000 limit.

The check-up payment can be made in cash, unlike insurance premiums, which must be paid by non-cash means. Keeping receipts is important for claiming this benefit during tax filing.

How Much Tax Deduction is Allowed Under Section 80D?

 

The total deduction allowed under Section 80D depends on the age and relationship of the insured persons. For self, spouse, and dependent children, you can claim ₹25,000 (or ₹50,000 if any of them is a senior citizen). An additional ₹25,000 or ₹50,000 is allowed for parents, depending on their age.

Insured Person(s)	Age of Insured	Maximum Deduction
Self, Spouse, and Dependent Children	Below 60 years	₹25,000
Self, Spouse, and Dependent Children	60 years and above	₹50,000
Parents (whether dependent or not)	Below 60 years	₹25,000
Parents	60 years and above	₹50,000
Preventive Health Check-up (within limit)	Included in above limits	Up to ₹5,000

Therefore, the maximum possible deduction can be up to ₹1,00,000 if both the taxpayer and their parents are senior citizens. Preventive health check-up expenses are included within these overall limits.

Claiming Tax Benefits: Documentation and Payment Methods

 

• Proof of Payment: Keep premium payment receipts or bank statements as proof of payment.
• Policy Certificate: Maintain a copy of the health insurance policy that clearly shows the insured members and the premium amount.
• Mode of Payment: Premiums must be paid through non-cash methods, like credit/debit cards, net banking, UPI, or cheques.
• Preventive Check-up Bills: Save bills for preventive health check-ups, which can be paid in cash.
• Name Match: Ensure the policyholder’s name matches your tax records.
• Correct Assessment Year: Claim the deduction in the correct financial year to avoid rejection.

Common Mistakes to Avoid While Claiming Mediclaim Deductions

 

• Paying in Cash: Premiums paid in cash are not eligible for tax deduction.
• Including Non-dependent Children: Only premiums for dependent children are deductible.
• Exceeding Deduction Limits: Ensure your claimed amount doesn’t exceed the eligible limit based on age and relationship.
• Missing Documentation: Failing to keep receipts or policy documents can result in disallowance.
• Incorrect PAN or Details: Errors in policy or tax records can cause delays in processing.
• Ignoring Preventive Check-up Cap: Claiming over ₹5,000 for check-ups isn't allowed, even within the main limit.

Section 80D offers a valuable way to protect your health while reducing your tax burden. By understanding the eligibility requirements, limits, and necessary documentation, you can maximise the benefits of this program. Whether you're insuring yourself, your family, or your parents, careful planning and accurate filing ensure you get the full deduction you’re entitled to.

FAQs on Section 80D and Mediclaim Deductions

 

Q1. What comes under Section 80D?

Section 80D covers tax deductions for premiums paid on health insurance policies for self, spouse, dependent children, and parents. It also includes preventive health check-ups (up to ₹5,000) within the total eligible deduction limit. IRDAI must approve policies, and payments should be made via non-cash methods.

Q2. What tax exemption can I claim under Section 80D?

You can claim up to ₹25,000 for yourself and family, and an additional ₹25,000 for parents. If the insured individuals are senior citizens, these limits increase to ₹50,000 each. The maximum deduction possible under Section 80D is ₹1,00,000 in a financial year.

Q3. Who can claim an 80D deduction?

Individuals and Hindu Undivided Families (HUFs) who pay health insurance premiums for themselves or eligible family members can claim a deduction. The insured must be a resident of India, and the premium must be paid in a non-cash mode to qualify for the benefit.

Q4. Can I claim preventive health check-ups for parents?

Yes, you can claim up to ₹5,000 for preventive health check-ups for parents under Section 80D. This amount is part of the overall deduction limit (₹25,000 or ₹50,000) for parental health insurance and does not constitute an additional benefit beyond the base limits.

Q5. Can HUFs get tax exemptions under Section 80D?

Yes, Hindu Undivided Families (HUFs) can claim deductions under Section 80D for health insurance premiums paid for any member of the HUF. The deduction limit is ₹25,000 or ₹50,000, depending on the age of the insured member. Payment must be made through non-cash modes.

AN Aug 27/25