Medical bills can be a significant expense for individuals and families, and the Indian government provides tax benefits through various provisions to help ease the financial burden. One such provision is Section 80D of the Income Tax Act, which allows people to claim deductions for health insurance premiums and preventive health check-up expenses. So, if you are wondering can medical bills be claimed under 80D, the simple answer is yes.
As you are now clear about the question of can medical bills be claimed under Section 80D, in this blog, we will discuss Section 80D in detail, including what it is, the deductions available, and the additional tax benefits of health insurance.
What is Section 80D?
The Income Tax Act’s Section 80D is a tax-saving provision in India that offers deductions on premiums paid towards health insurance policies, providing a valuable health insurance tax benefit. It aims to provide financial relief to individuals by reducing their taxable income and overall tax liability. Taxpayers can effectively reduce their taxable income by claiming deductions on health insurance premiums, further enhancing their health insurance tax benefit. This results in lower tax liability and a higher disposable income.
The main benefit of Section 80D deduction is that it encourages individuals to secure health insurance coverage for themselves and their family members. This incentivises individuals to prioritise health insurance for their family’s well-being and financial security. Another advantage of Section 80D is that it promotes preventive healthcare. Thus if you’re wondering can medical expenses be claimed under 80D, the answer is a resounding Yes. You can claim your medical bills for tax relief up to the prescribed limit.
What are the Deductions Under Section 80D?
The maximum deduction limit depends on the insured person's age and his/her parents' age, if applicable. Let us take a look at the deductions available under Section 80D:
- For individuals aged below 60: The maximum deduction limit is Rs 25,000 for premiums paid for self, spouse, and children. A deduction of Rs 25,000 is also allowed for premiums that you pay for your parents. Therefore, the total deduction limit for individuals below 60 years of age is Rs 50,000 (Rs 25,000 + Rs 25,000)
- For individuals aged more than 60: The maximum deduction limit is Rs 50,000 for premiums paid for self, children, and spouse. Additionally, you can avail of a deduction of Rs 50,000 for premiums paid for your parents. Therefore, the total deduction limit for individuals above 60 years of age is Rs 1,00,000 (Rs 50,000 + Rs 50,000)
- For HUF (Hindu Undivided Family): Up to ₹25,000 can be claimed for premiums paid for the HUF and its members (including spouses, children, and dependent relatives). If the insured individuals are senior citizens, this increases to ₹50,000.
It is important to know that these tax benefits are available if and only if you make the payments through bank transfer.
Amount of Deduction Available under Section 80D
The amount of deductions available under Section 80D depends on the age of persons for whom the policy is insured. The following section will give you a clear view of the deduction limit under this section for different people.
1. For Self, dependent children and spouse
Rs.25,000 if the age of all are below 60 years.
Rs.50,000 if children are below 25 and at least one member is above 60 years old.
2. For parents
Rs.25,000 if both of them are below 60 years.
Rs.50,000 if their age is above 60 years.
3. For self, spouse, dependent children and parents
Rs.50,000 if the parents are aged below 60.
Rs.75,000 if the parents are below 60 years of age.
4. For self, spouse, dependent children and parents
Rs.1,00,000 if the policyholder or the dependent spouse is above 60 years of age and the parents are senior citizens.
5. Members of a Hindu undivided family
Rs. 25000
6. Members of a Hindu undivided family
Rs.50000 if the members are aged above 60 years.
7. Deduction Towards Preventive Healthcare
Rs.5,000 for all ages.
Additional Tax Benefits of Health Insurance
Health insurance policies provide additional tax benefits under Section 80D.
- These benefits are in the form of deductions for preventive health check-up expenses. Taxpayers can claim tax deductions of up to Rs 5,000 for expenditures incurred on preventive health check-ups for themselves, their children and spouse, as well as their parents. Note that you can avail of these benefits even for cash payments. This is within the overall limit of the deduction available under Section 80D.
- The objective of undergoing preventive health check-ups is the early detection as well as prevention of ailments. The expenses incurred on such check-ups can be claimed as a deduction under Section 80D, helping taxpayers save on their tax liabilities.
Thus, Section 80D of the Income Tax Act offers significant tax benefits to individuals by reducing their taxable income through deductions on health insurance premiums. It promotes the importance of health insurance, encourages preventive healthcare, and provides financial relief to taxpayers. So plan your health and taxes judiciously to reap the optimum benefit.