What is Covered Under Section 80D?

When it comes to tax planning, most of us focus on deductions under Section 80C, but did you know that another section can help you save on taxes and secure your family's healthcare needs simultaneously? Yes, we're talking about Section 80D of the Income Tax Act, which offers tax benefits on health insurance premiums paid by an individual or a Hindu Undivided Family (HUF). But that's not all. This section also covers expenses incurred on preventive health check-ups, making it an excellent tool to take care of your health and finances simultaneously.

So, if you're curious to know more about what is covered under Section 80D, buckle up, as this article will take you on a ride that will help you understand this section in detail.
 

What is Covered Under Section 80D?

Under section 80D medical insurance, the Income Tax Act of 1961 provides tax benefits to individuals and Hindu Undivided Families (HUF) for medical insurance premium payments and various medical expenses. However, the amount of tax benefit is subject to certain conditions and limits.

Taxpayers can apply for a deduction of up to ₹25,000 from their taxable income for medical insurance premiums paid for themselves, their spouses, dependent children, and parents. This deduction exceeds the ₹1.5 lakh deduction available under Section 80D.

Eligibility Criteria for Section 80D

Now that you know what is covered under Section 80D, let’s have a look at the eligibility criteria to avail of the deduction under this section:

• The taxpayer should be a member of a Hindu Undivided Family (HUF).
• They should have paid medical insurance premiums for themselves, their spouse, dependent children, and parents.
• They should have incurred medical expenses to treat specific diseases and ailments.
• They should have incurred medical expenses for any senior citizen (above 60 years).
• They should have incurred medical expenses for any senior citizen (above 80 years).
• The deductions under Section 80D should not exceed the taxpayer's total taxable income.

Limits for Deductions Under Section 80D

These points will help you understand the limits for deductions under Section 80D:

• The deduction limit for health insurance premiums paid for self, spouse, and dependent children is ₹25,000 per year. If you or your spouse is a senior citizen, the limit is increased to ₹50,000 per year.
• In addition to the above, you can also claim a deduction of up to ₹25,000 per year for health insurance premiums paid for your parents. If your parents are senior citizens, the limit is increased to ₹50,000 per year.
• In addition to health insurance premiums, you can also claim a deduction of up to ₹5,000 per year for preventive health check-ups for yourself, your spouse, your dependent children, and your parents. This deduction is within the overall limit of ₹25,000 or ₹50,000, as applicable.
• It's necessary to note that these deduction limits are not cumulative, meaning you can't claim more than the specified amount even if your actual expenses exceed the limit.
• If you are claiming a deduction for health insurance premiums or preventive health check-ups, you need to pay these expenses by any mode other than cash.
   
• It's important to keep accurate records of your health insurance premiums and medical expenses to claim the deduction accurately.

Documents Required to Claim Deduction Under Section 80D

To claim the deduction for health insurance under which Section 80D is applicable, taxpayers are required to submit the following documents:

• A copy of the medical insurance policy
• A copy of the medical expense receipt
• A copy of the medical practitioner’s prescription
• A copy of the hospital discharge summary
• A copy of the senior citizen’s identification card

Conclusion

Taxpayers should submit the relevant documents to claim the deduction under Section 80D. These deductions can be claimed if health insurance premiums are paid electronically or digitally, such as through cheques, debit cards, credit cards, UPI, etc. As a result, if the health insurance premium is paid in cash, the individual cannot claim the Section 80D tax benefit. However, cash payments are accepted for preventive health check-ups. Platforms like Niva Bupa can help you provide health plans that protect your family in health emergencies and offers benefits like hassle-free claim settlement and affordable premiums.