Section 80D of the Income Tax Act, 1961, allows taxpayers to claim a deduction for the amount of premium paid for health insurance coverage for themselves, their spouse, dependent children, and parents. The maximum deduction that can be claimed under this section is Rs. 25,000 per financial year for taxpayers below the age of 60 years and Rs. 50,000 per financial year for taxpayers aged 60 years or above.

The following types of health insurance premiums are eligible for deduction under Section 80D:

• Premiums paid for individual health insurance policies
• Premiums paid for family floater health insurance policies
• Premiums paid for health insurance policies for parents
• Premiums paid for group health insurance policies offered by employers
• Premiums paid for preventive health check-ups

To claim the deduction under Section 80D, taxpayers need to provide the following details in their income tax return (ITR):

• Name of the insurance company
• Policy number
• Premium amount paid
• PAN of the insured person

Taxpayers can claim the deduction under Section 80D even if they have not availed of any medical treatment during the financial year.

The following are some of the benefits of claiming the deduction under Section 80D:

• Reduces taxable income
• Saves income tax
• Encourages people to buy health insurance
• Promotes preventive healthcare

Example:

Rahul is a 35-year-old taxpayer who has paid a premium of RS. 25,000 for his health insurance policy in the financial year 2023-24. He can claim a deduction of RS. 25,000 under Section 80D in his ITR for the financial year 2023-24.

Note: The deduction under Section 80D is subject to certain conditions and restrictions. Taxpayers should consult with a tax expert to understand the eligibility criteria and to claim the deduction correctly.

Examples

Example of deduction in respect of medical insurance premia (Section 80D)

Assume that you are a 35-year-old individual and you have purchased a health insurance policy for yourself and your spouse. The premium for the policy is RS. 25,000. You can claim a deduction of RS. 25,000 under Section 80D of the Income Tax Act.

Another example, assume that you are a senior citizen (aged 60 years or above) and you have purchased a health insurance policy for yourself and your parents. The premium for the policy is RS. 50,000. You can claim a deduction of RS. 50,000 under Section 80D of the Income Tax Act.

Here is an example of how the deduction under Section 80D can be calculated:

Gross income: RS. 10 lakh

Health insurance premium: RS. 25,000

Deduction under Section 80D: RS. 25,000

Taxable income: RS. 7.5 lakh

Tax liability: RS. 1.5 lakh (assuming a tax rate of 20%)

Tax savings: RS. 5,000 (20% of RS. 25,000)

As you can see, claiming the deduction under Section 80D can help you reduce your taxable income and save tax

Case laws

• CIT v. Ramesh Chandra Maheshwari (2016): In this case, the Supreme Court held that the deduction under Section 80D is available for the premium paid towards a medical insurance policy even if the policy is taken in the name of a dependent child who is a minor.
• Ashok Kumar v. ACIT (2014): In this case, the Delhi High Court held that the deduction under Section 80D is available for the premium paid towards a medical insurance policy even if the policy is taken for the self-employed individual’s parents, who are not dependent on him.
• ACIT v. K.V.N.R. Subrahmanyam (2012): In this case, the Andhra Pradesh High Court held that the deduction under Section 80D is available for the premium paid towards a medical insurance policy even if the policy is taken for the self-employed individual’s spouse and children who are earning members.
• CIT v. D.S. Ramana Murthy (2009): In this case, the Karnataka High Court held that the deduction under Section 80D is available for the premium paid towards a medical insurance policy even if the policy is taken for the self-employed individual’s parents who are not senior citizens.

In addition to these case laws, there are a number of other rulings by the Income Tax Appellate Tribunal (ITAT) and various High Courts on the deduction under Section 80D. These rulings have clarified a number of issues, such as the eligibility of different types of medical insurance policies, the treatment of preventive health check-ups, and the deduction for premium paid towards medical insurance policies for parents.

FAQ questions

Q: What is the deduction available under Section 80D for medical insurance premia?

Under Section 80D of the Income Tax Act, individuals can claim a deduction for the premium paid for health insurance policies for themselves, their spouse, dependent children, and parents. The maximum deduction available under Section 80D is as follows:

• For self, spouse, and dependent children: RS. 25,000
• For parents (if senior citizens): RS. 50,000
• For parents (if not senior citizens): RS. 25,000

Q: Who is eligible to claim the deduction under Section 80D?

All Indian citizens, including government employees, private sector employees, and self-employed individuals, are eligible to claim the deduction under Section 80D.

Q: What types of medical insurance policies are eligible for the deduction under Section 80D?

The following types of medical insurance policies are eligible for the deduction under Section 80D:

• Health insurance policies issued by insurance companies registered with the Insurance Regulatory and Development Authority of India (IRDAI)
• Group health insurance policies issued by employers to their employees
• Health insurance policies issued by the government of India or state governments

Q: 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) for the relevant financial year. You need to provide details of your medical insurance premium payments in your ITR.

Q: What are the documents required to claim the deduction under Section 80D?

You need to submit the following documents to claim the deduction under Section 80D:

• Copies of your medical insurance policies
• Receipts for payment of medical insurance premiums

Here are some additional FAQs on the deduction in respect of medical insurance premia (Section 80D):

• Can I claim the deduction under Section 80D for medical insurance policies purchased for my relatives other than my spouse, dependent children, and parents?

No, you cannot claim the deduction under Section 80D for medical insurance policies purchased for your relatives other than your spouse, dependent children, and parents.

• Can I claim the deduction under Section 80D for medical insurance policies purchased outside of India?
• Yes, you can claim the deduction under Section 80D for medical insurance policies purchased outside of India, provided that the insurance company is registered with the Insurance Regulatory and Development Authority of India (IRDAI).

• What is the deadline for filing income tax returns to claim the deduction under Section 80D?

The deadline for filing income tax returns to claim the deduction under Section 80D is 31st July of the assessment year.