What Deductions Are Allowed Under Section 80D?

As a taxpayer, you're probably familiar with the concept of deductions - the money you can subtract from your taxable income to reduce your tax liability. However, were you aware that you can also claim deductions for certain healthcare expenses under section 80D of Income Tax Act? It offers taxpayers an opportunity to reduce their taxable income by filing or claiming deductions on health insurance premiums and healthcare expenses for themselves, their spouses, dependent children, and parents.

In this blog, we'll explore the various deductions that are allowed under the defined section and how you can maximise your savings on healthcare expenses while staying tax compliant.

What is Section 80D?

It is a provision under the Income Tax Act that allows taxpayers to claim deductions for healthcare expenses incurred for themselves, their spouses, dependent children, and parents. This section provides deductions for health insurance premiums paid and expenses incurred for preventive health checkups. The deduction limits depend on the taxpayer's age and the family member for whom the expenses are incurred. It encourages taxpayers to invest in their health and well-being by reducing their tax liability. Moreover, it incentivises taxpayers to purchase health insurance and provide preventive healthcare services, resulting in better health outcomes for individuals and society.

Deductions for Medical Insurance Premium

Section 80D of Income Tax Act allows taxpayers to claim deductions for medical insurance premium payments made for themselves, their spouses, dependent children, and parents. The deductions available under this section are as follows:

• For individuals and HUFs, a deduction of up to ₹25,000 can be claimed for the medical insurance premium paid for themselves, their spouse, and dependent children.
• For senior citizens (above 60 years), the deduction limit is increased to ₹50,000 for the medical insurance premium paid for themselves and their families.
• Taxpayers can claim an additional tax deduction of up to ₹5,000 for preventive health checkups for themselves, their spouses, and dependent children. However, it's important to note that the insurance policy must be purchased from a registered insurer to claim these deductions, and payments must be made through any mode other than cash.

Deductions for Health Insurance Premium Payments for Senior Citizens

The section provides additional deductions for senior citizens on health insurance premium payments. Senior citizens (above 60 years of age) can claim a deduction of up to ₹50,000 for the medical insurance premium paid for themselves, their spouse, dependent children, and parents. This deduction is above the existing deduction limit available under section 80D. The policy must be purchased from a registered insurer, and payments must be made through any mode other than cash.

Additionally, senior citizens can claim a deduction of up to ₹1 lakh for the medical treatment of specified diseases for themselves, their spouses, dependent children, and parents. The specified diseases include cancer, chronic renal failure, and certain specified neurological diseases.

Conclusion

Section 80D provides various tax deductions on healthcare expenses. By availing of these deductions, taxpayers can prioritise their health and well-being and save significantly on their tax liability. So, if you're looking for the right and best health insurance policy that offers comprehensive coverage and helps you save on healthcare expenses, Niva Bupa has you covered. They offer a wide range of health insurance plans with customisable coverage options, allowing you to choose the top-notch plan that suits your needs and budget. So, why wait? Visit Niva Bupa today and secure your health and financial well-being.