We all know that Sec. 80C is the most widely used section by individuals to claim deductions from the Gross total income. Sec. 80C is like Batman which fights the taxes, while Sec. 80D can be likened to Robin, the sidekick of Batman who seldom takes lead, but aids batman i.e. Sec. 80C in fighting taxes.

Yes, Sec. 80D may not provide you with equivalent ammunition to fight with taxes as Sec. 80C does, but it contributes enough to lower or nullify your taxes depending on the tax bracket you belong to.

What is Section 80D?

Section 80D allows you to claim the premium or any other amount paid towards the upkeep of the medical insurance in the financial year as a deduction from your gross total income, thus reducing your tax burden.

The following payments qualify under Section 80D:

  • Any amount paid towards Top up, Family floater, Critical illness and Senior citizen plans
  • Premium paid towards medical insurance
  • Expenditure incurred on account of preventive health check-up subject to a maximum limit of Rs 5,000
  • Medical expenditure incurred on the health of senior citizen who is not covered under any health insurance scheme.
  • The contribution made to the Central government health scheme or any scheme as notified by the government.

Who are eligible?

Individuals (including Non residents) and HUF are eligible to claim deduction under this section.

An individual can claim deduction for

  • Self
  • Spouse
  • Dependent children
  • Parents

Quantum of Deduction

ScenarioMaximum Quantum of DeductionRemarks
Individual and parents below 60 yearsRs 50,000Rs 25,000 each for Self (including family) and Parents
Individual and family below 60 years but parents above 60 yearsRs 75,000Rs 25,000 for Self and Rs 50,000 for Parents
Non-resident Individual and ParentsRs 50,000Rs 25,000 each for Self (including family) and Parents despite being senior citizens
Member of HUF who are below 60 years of ageRs 25,000 
Member of HUF who are above 60 years or aboveRs 50,000 

All is not over yet, read on these Points to avoid any unanticipated disqualifications in future:

  • GST and Cess components of the Premium or any other amount paid to upkeep the health insurance doesn’t qualify for deduction
  • Dependent children can be either an unemployed male child up to a maximum age of 25 years or an unemployed female child till she is unmarried. Once children get into employment, they cease to fall under the category of dependent children
  • Parent’s need not be dependent on individual to become eligible for the deduction
  • If a taxpayer makes a lumpsum premium payment in a single year for a policy and if the policy is valid for more than one year, the individual can claim a tax deduction equal to proportionate amount belonging to that financial year only
  • Eligible amount that can be claimed as deduction under this section is the actual payment made or the quantum prescribed above whichever is lower
  • Individuals and members of HUF need not submit the documental proofs. They have to be retained for future submission if in case called upon by the IT officer

With all that said, probably you must have made up your mind to go for a Medical insurance policy to reduce your taxes. How to chose one though? Find here how to and how not to chose a medical policy. Happy reading!

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