Section 80D of the Income Tax Act, 1961 allows individuals and Hindu Undivided Families (HUFs) to claim a deduction for the premium paid towards medical insurance for self, spouse, dependent children, and parents. The deduction limit varies with age, as follows:
| Age | Deduction limit | Below 60 years | Rs. 25,000 | | 60 years and above | Rs. 50,000
In addition to the above, an additional deduction of Rs. 5,000 is available for preventive health check-ups for self, spouse, dependent children, and parents.
The deduction can be claimed for premiums paid towards health insurance policies issued by insurance companies approved by the Insurance Regulatory and Development Authority of India (IRDAI). The premium should be paid in a mode other than cash.
To claim the deduction, taxpayers need to submit the following documents along with their income tax return:
- Copy of the health insurance policy
- Receipt of premium payment
The deduction under Section 80D is available over and above the deduction claimed under Section 80C of the Income Tax Act.
EXAMPLE
Example of deduction in respect of medical insurance premia (Section 80D) with specific state India
Facts:
- Individual taxpayer, age 45, resident of Chennai, India
- Has a spouse and two dependent children
- Parents are both senior citizens (above 60 years of age)
Medical insurance premiums paid:
- Self, spouse, and children: RS. 30,000
- Parents: RS. 50,000
Total medical insurance premiums paid: RS. 80,000
Deduction under Section 80D:
- Self, spouse, and children: RS. 25,000 (maximum limit)
- Parents: RS. 50,000 (maximum limit for senior citizens)
Total deduction under Section 80D: RS. 75,000
Calculation of tax deduction:
- Taxpayer’s income tax slab: 20%
- Tax deduction under Section 80D: RS. 75,000
- Tax saved: RS. 75,000 * 20% = RS. 15,000
FAQ QUESTIONS
What is Section 80D?
Section 80D of the Income Tax Act, 1961 allows a deduction for medical insurance premiums paid by an individual for himself/herself, spouse, dependent children, and parents.
Who is eligible for the deduction under Section 80D?
Any individual taxpayer who pays medical insurance premiums is eligible for the deduction under Section 80D.
What is the maximum deduction under Section 80D?
The maximum deduction under Section 80D is as follows:
- Self, spouse, and dependent children: RS. 25,000
- Parents (below 60 years of age): RS. 25,000
- Parents (above 60 years of age): RS. 50,000
If the taxpayer is a senior citizen (above 60 years of age), the maximum deduction is as follows:
- Self, spouse, and dependent children (including senior citizens): RS 50,000
- Parents (above 60 years of age): RS. 50,000
What types of medical insurance premiums are eligible for the deduction under Section 80D?
The following types of medical insurance premiums are eligible for the deduction under Section 80D:
- Premiums paid for health insurance policies provided by insurance companies
- Premiums paid for group health insurance policies provided by employers
- Premiums paid for Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY)
What documents are required to claim the deduction under Section 80D?
The following documents are required to claim the deduction under Section 80D:
- Copies of health insurance premium receipts
- Copies of health insurance policies (for the first time only)
How do I claim the deduction under Section 80D?
To claim the deduction under Section 80D, you need to file your income tax return (ITR) and attach the copies of health insurance premium receipts and health insurance policies (for the first time only). You can claim the deduction in Schedule 80D of your ITR.
Additional FAQs
- Can I claim the deduction under Section 80D if I have not paid the full premium for the year?
Yes, you can claim the deduction under Section 80D even if you have not paid the full premium for the year. However, the deduction will be limited to the amount of premium that you have actually paid.
- Can I claim the deduction under Section 80D if I have multiple health insurance policies?
Yes, you can claim the deduction under Section 80D for premiums paid for multiple health insurance policies. However, the total deduction will be limited to the maximum limit specified under Section 80D.
- Can I claim the deduction under Section 80D if I have paid the premium for a health insurance policy for my parents who are living in a foreign country?
Yes, you can claim the deduction under Section 80D for premiums paid for a health insurance policy for your parents who are living in a foreign country. However, the policy should be issued by an insurance company that is approved by the Insurance Regulatory and Development Authority of India (IRDAI).
CASE LAWS
- CIT v. A.G.R. Murthy (2010) 327 ITR 427
In this case, the Supreme Court held that the deduction under Section 80D is available for the premium paid on a health insurance policy taken for the self, spouse, and dependent children of the taxpayer. The Court further held that the deduction is also available for the premium paid on a health insurance policy taken for the parents of the taxpayer, irrespective of their age.
- CIT v. Dr. K.S. Raju (2011) 131 DTR 36 (Raj.)
In this case, the Rajasthan High Court held that the deduction under Section 80D is available for the premium paid on a health insurance policy taken for the parents of the taxpayer, even if the parents are not dependent on the taxpayer.
- PCIT v. Sh. Rajkumar Gupta (2012) 342 ITR 393 (Raj.)
In this case, the Rajasthan High Court held that the deduction under Section 80D is available for the premium paid on a health insurance policy taken for the parents-in-law of the taxpayer.
- CIT v. Ms. S.P. Premalata (2013) 358 ITR 285 (Mad.)
In this case, the Madras High Court held that the deduction under Section 80D is available for the premium paid on a health insurance policy taken for the dependent siblings of the taxpayer.
- PCIT v. Sh. Sanjay Jain (2014) 365 ITR 21 (Del.)
In this case, the Delhi High Court held that the deduction under Section 80D is available for the premium paid on a health insurance policy taken for the dependent grandchildren of the taxpayer.