Here’s How You Can Avail Sec 80D Deductions With Health Insurance

There is no doubt that sufficient medical coverage has become the prime focus in our lives. With a global pandemic taking the world by a storm, the importance of having adequate medical coverage has become essential. Due to the prevalent medical inflation, the in sky-high treatment costs may result in a drain of your savings. So, to avail timely medical treatment with facilities like cashless hospitalisation, pre and post treatment coverage, ambulance support and more, it is a prudent choice to opt for a medical insurance cover.

A medical insurance plan or popularly known as health insurance policy helps to mitigate the financial burden for medical treatments. Not only that, it further offers the benefits of tax deductions too. This article enlists how you can avail a deduction in your income tax returns with section 80D:

Deduction for health insurance premium paid

All health insurance plans qualify for availing tax deduction from your return of income. Be it an individual policy, or even a family health insurance cover, you can avail the deduction of the premium paid. The limit prescribed under the Income Tax Act, 1961 is set at ₹25,000 for folks who do not qualify as senior citizens whereas the same limit extends up to ₹ 50,000 for senior citizens. The classification of a person as senior or non-senior citizen is based on age limit. If an individual crosses the age of 60 years, they shall be deemed to be a senior citizen as per the Income Tax Act.

Deduction for preventive health check-up

Apart from availing a deduction for health insurance premiums, preventive health check-ups are also deductible from your return of income. The maximum amount of deduction available for a preventive health check-up is ₹ 5,000. This amount is included in the aforementioned limit of ₹ 25,000 and ₹ 50,000 for senior citizens under section 80D of the Income Tax Act.

No benefits for cash payments

The payments for your health insurance policy should be through an organised banking channel like cheque, credit or debit card or net banking facility, etc. The payments made in cash shall not be eligible for deduction. However, the payment for preventive health check-up can be made in cash and is deemed valid for a deduction.

The table below summarises the limits that you can maximum avail –

Scenario Premium for and the maximum deduction that can be availed Total deduction under section 80D
For policyholder, their spouse, and their dependent children For parents, whether they are dependent or not
All Beneficiaries are not senior citizens Up to ₹ 25,000 Up to ₹ 25,000 ₹ 50,000
The policyholder and other family members are below 60 years
Parents are over the age of 60 years
Up to ₹ 25,000 Up to ₹ 50,000 ₹ 75,000
Either the policyholder or any other family member has crossed the age of 60
Parents are also above the age of 60 years
Up to ₹ 50,000 Up to ₹ 50,000 ₹ 1,00,000

The preventive health check-up is an internal sub-limit available for all of the above scenarios up to ₹ 5,000.

While there are myriad options that you can choose from, health insurance for senior citizens provides the benefit to avail treatment for age related problems for senior citizens. Make sure you purchase the right insurance coverage for you and your family. Using these health insurance benefits, you can not only avail suitable medical coverage, but also benefits in form of tax deductions.