What is Section 80D under Income Tax? And Deduction under Section 80D of Income Tax Act

Introduction

In India, the majority of people do not have health insurance and must rely on their savings or borrowing in the event of a medical emergency. Medical insurance is a must-have in your financial portfolio because the government encourages everyone to get it and offers tax advantages under Section 80D of Income Tax Act. In this article we will look into Health Insurance under Section 80D, “What is Section 80D under Income Tax?” And deduction under Section 80D.

What is Section 80D under Income Tax?

Section 80D of the Income Tax Act of 1961 allows for a tax deduction on health insurance premiums. Section 80D allows anybody to claim a deduction for health insurance premiums paid on their total income. Medical deductions are available for a variety of health insurance top-up plans as well as critical illness insurance. These health insurance tac benefits are available for self-insured spouses, dependent children, or parents with health insurance plans.

Exemptions under Section 80D of Income Tax Act

Premium Payments: To qualify for tax benefits under section 80D, only the taxpayer should pay health insurance premiums. If a third party pays the premium, the taxpayer is not eligible for the deduction under section 80D. Furthermore, taxpayers will not be eligible for tax benefits if premium payments are made in cash.

Tax Benefits on Service Tax and Cess Charges: No tax benefits on service tax and cess charges levied on premium payments are available to taxpayers. Service tax is charged on health insurance premiums for the uninsured, and the amount payable is equal to 14% of the premium.

Group Health Insurance: Under Section 80D of the Income Tax Act, group health insurance policies do not qualify for any tax benefits. However, if taxpayers want to expand their group coverage by paying a higher premium, they can deduct the difference under section 80D.

Eligibility Criteria for Health insurance under Section 80D  

Medical insurance premiums and medical expenses for elderly people can only be deducted by individuals and HUF (Hindu Undivided Family) taxpayers.

Individual or HUF (Hindu Undivided Family) taxpayers can get insurance for:

• Children who are dependent on their parents
• Parents
• Fore their Own (Self)
• For Spouse

This deduction is not available to any other entity. A company or a firm, for example, cannot claim a deduction under this clause.

Deduction under Section 80D of Income Tax Act

• Deduction allow for an Individual under Section 80D

1. 1. For self-insurance, spouse insurance, and dependent children insurance, an individual can claim a deduction of up to Rs 25,000.
   2. If your parents are under the age of 60, an additional/separate deduction of Rs 25,000 is available, and if they are over 60, an additional/separate deduction of Rs 50,000 is allowed.
   3. If medical expenses incurred for elderly persons (self, spouse, dependent children, and parents) are not covered by any medical insurance, you can claim a deduction for the charges up to Rs 50,000.
   4. If both the taxpayer and the taxpayer’s parents are over 60 years old and have medical insurance, the maximum deduction available under this clause is Rs 1,00,000. If a senior citizen (taxpayer/family and parents) has medical expenses that are not covered by health insurance, you can claim a deduction for those expenses up to a certain amount.
   5. The maximum deduction permitted for senior citizens is Rs 50,000.

• Deduction allow for HUF under Section 80D

1. 1. A HUF can claim a deduction for a Mediclaim paid for any of its members under Section 80D.
   2. If the insured member is under 60 years old, the deduction will be Rs 25,000; if the insured is 60 years old or above, the deduction will be Rs 50,000.

Essential Points for Health Insurance under Section 80D

• The cost of medical insurance for a brother, sister, grandparents, aunts, uncles, or any other relative is not tax-deductible.
• Premiums paid on behalf of working children are not eligible for tax deductions.
• You can individually claim a deduction for the amount you paid if you and a parent each paid a piece of the bill.
• The deduction must be made without disclosing the service tax and Cess proportion of the premium amount.
• The cost of group health insurance offered by your employer is not tax-deductible.
• Premiums paid by anyway other than cash are eligible for the deduction. As a result, premiums paid by credit card or another online means qualify for a tax deduction.

FAQs for Section 80D under Income Tax Act

1. What is the procedure for claiming a deduction under Section 80D?

Tax deductions are available for individual health insurance and family insurance plans. Premiums paid for health insurance for yourself, your spouse, your dependent children, and/or your parents are deductible. Premiums paid for siblings’ health insurance are not eligible for a tax deduction. Premium payments can be made online or offline, with the exception of cash. Debit card, credit card, and net banking are all acceptable online payment methods.

2. Can I still get tax breaks if I pay for my health insurance policy with cash?

No, if you pay your health insurance premiums in cash, you won’t be eligible for tax breaks under Section 80D of the Income Tax Revenue. If you want to claim a tax deduction under section 80D, you should pay your health insurance premiums with checks or online.

3. Which type of investments are covered by section 80D?

You can deduct the cost of health insurance premiums as well as the cost of a preventative health examination under Section 80D.

4. Is it possible for me to get a tax break on my group health insurance?

No, group health insurance coverage does not qualify for tax incentives. You can claim a tax exemption under Income Tax Section 80D if you have an individual health insurance policy in addition to the group health insurance policy.