Select Your Location
Filing of Income Tax Return is the process of submitting a declaration about the income earned and expenditure incurred by the concerned taxpayer in the previous financial year. The concerned taxpayer submits this declaration to the Income Tax Department. On the other hand, this declaration assists in determining the tax liability of the concerned taxpayer. Also, the tax liability is computed on the basis of the prevailing tax rate slabs. Hence, ITR Filing is obligatory for all the taxpayers whose income exceeds the prescribed income threshold. Lastly, the process of ITR Filing is regulated and administered under the Income Tax Act, 1961.
Further, the Tax Deductions allowed under the Income Tax Act, 1961 helps a taxpayer in reducing his taxable income. A Taxpayer can avail these deductions only if he or she have made tax-saving investments or have incurred qualified expenses. Furthermore, there are several of tax deductions provided under the various sections that will help in bringing down the taxable income. Out of all the deductions available, the most popular one is the deduction provided under section 80C of Chapter VIA. But, the other chosen deductions under chapter VIA are 80D, 80DD, 80E, 80G, 80DDB, 80U and so on. In this blog, we will be dealing with the deduction provided under section 80D of the Income Tax Act, 1961.
Medical emergencies do not come with prior notice. Hence, it is always advisable to be safe than be sorry, and it is no special when it comes to Medical Insurance. On the other hand, having a Medical Insurance is must for any investment portfolio; moreover, the government also encourages everyone to invest in medical insurance and also allows the taxpayer to avail deductions regarding this under Section 80D of the Income Tax Act, 1961.
Table of Contents
Section 80D of the income tax laws provides for the tax deduction from the total taxable income regarding the payment of the medical insurance premium, which is paid either by an individual or a HUF (Hindu Undivided Family). Further, not only the individual can take the benefit by purchasing a health plan for himself, but can also avail the benefit by buying the health plan policy to secure his spouse, or his dependent children or parent. Also, the tax deduction provided under Section 80D is over and above the threshold limit of the deduction provided under Section 80C, 80CCC, and 80CCD of the Income Tax Act, 1961.
Section 80D of the Income Tax Act, 1961 was introduced with a motive of promoting the concept of health planning among individuals and HUF (Hindu Undivided Family). Section 80D provides tax deduction on the following listed expenditure –
Further, the amount of deduction depends on the nature of expenditure incurred, mode of payment and the age and relation of the person for whom the concerned expenditure has been done.
Who all are eligible to Claim Deduction under section 80D?
The following can claim the tax deduction provided under Section 80D of the Income Tax Act, 1961 –
The following table includes the quantum of deduction available to an individual and HUF taxpayer under various scenarios –
Deduction provided under 80D
Self, Spouse, Dependent Children
Both the Individual and parents are below 60 years
If the Individual and family are below 60 years but the parents above 60 years
Both individual, his family and the parents are above 60 years
Members of HUF (Hindu Undivided Family)
If the members of HUF (Hindu Undivided Family) are above 60 years
Non-resident individual (NRI)
Example – Ques – Rohit is aged 46, and his father is aged 66 years. Rohit has taken a medical insurance cover both for himself and his father for which he pays insurance of Rs 30,000 and Rs 35,000 respectively. What would be the maximum amount that Rohit is eligible to claim by means of a deduction provided under Section 80D of the Income Tax Act, 1961 for the FY 2019-20?
Ans. – Rohit can claim to the extent of Rs 25,000, regarding the premium paid on his policy. On the other hand, for the policy concerning his father, who is a senior citizen, Rohit can claim to the extent of Rs 50,000. In the given scenario, the deduction is Rs 25,000 and Rs 50,000. Thus, the total deduction available for the year is Rs 75,000.
Any payment made towards the Preventive Health Check-ups will enable a taxpayer to a tax deduction of up to Rs 5,000, which is included in the overall limit of Rs 25,000 for the individual and his family and Rs 50,000 for his parents ( from 2018 Budget) as the case may be. On the other hand, this tax deduction can also be claimed by the individual either for himself, his spouse, dependent children or for his parents. Also, the payment for preventive health check-up can also be made in cash.
(Health Insurance Premium + Preventive Health Check Up Expenditure)
For Individual and Family
For Individual (Senior Citizen) and Family
For Parents (Senior Citizen)
For Individual’s Family and Parents
25,000 + 25,000 = 50,000
For Individual’s Family and Parents (Parents are Senior Citizens)
25,000 + 30,000 = 55,000
25,000 + 50,000 = 75,000
For Individual’s Family and Parents (Both are Senior Citizens)
30,000 + 30,000 = 60,000
50,000 + 50,000 = 1,00,000
Our Recommendation: Section 80DD of the Income Tax Act: Who can Claim this Deduction?
The Annual Financial Budget of the year 2018 has introduced a new regulation for claiming a tax deduction concerning the Single Premium Health Insurance Policies. As per this new regulation, a taxpayer has made a payment of the lump-sum amount as premium in one year for a plan which is valid for more than one year. Then he can claim a deduction equal to the appropriate fraction of the amount, provided under Section 80D of the Income Tax Act, 1961.
The appropriate fraction can be calculated by dividing the lump sum premium paid, with the number of years of the concerned policy or plan. However, this would again be subject to the threshold of Rs 25,000 and of Rs 50,000 as the case may be.O
As per section 80D of the Income Tax Act, no tax deduction shall be allowed on the following amounts –
Following are the points which must be taken into consideration before investing –
Medical Insurance and Medical Expenditure
Medical Treatment of a Disabled Dependent
Medical Treatment of Self or Dependant for the Specified Diseases
Medical Treatment of a Disabled Assessee (self)
Rs 75,000(for non-severe disability) or Rs 1,25,000(for severe disability)
Rs 40,000 (age is below 60 years) or Rs 1,00,000 (for the age 60 or above)
Rs 75,000 (in case of non-severe disability) or Rs 1,25,000(for the severe disability)
Type of Assessee
Individual or HUF (Hindu Undivided Family)
Resident Individual or HUF (Hindu Undivided Family)
Resident Individual or HUF (Hindu Undivided Family)
Also Read: Provision-wise Analysis of Key Income Tax Changes vide Finance Bill 2020
Shivani has completed her B com LLB (Hons) and has the experience of writing various research papers during her college time. Earlier she was working as an Associate in a law firm, but her interest in writing made her pursue content writing as a career. Her core area of interest is in writing about various legal enactments, tax and finance.
Black money has been the subject of heated political debate in India for a long time. Successiv...
The Apex Court pronounced a judgement in the case titled Tata Motors Vs The Brihan Mumbai Elect...
Since economies are moving towards digitalisation and making it feasible to conduct transaction...
The Alternative Investment Funds (AIFs) Pro-rata and Pari-Passu Rights Proposal Consultation Pa...
The Financial Action Task Force, i.e. FATF (the Force), is the global money laundering and terr...
Advance tax refers to the payment of the tax liability before the end of the relevant financia...
On 11.12.15, the Hon’ble Delhi High Court (HC) pronounced a landmark judgement in the case ti...
Money laundering can be defined as the process of illegal concealment of the origin of money ob...
Every assessee in India is obligated to file an income tax return and make the timely payment o...
In the recent past, India has seen burgeoning demand for internet and smartphones. The rapid ri...
Are you human?: 2 + 7 =
Easy Payment Options Available No Spam. No Sharing. 100% Confidentiality
The Karnataka High Court in the case of Nitesh Housing Developers (P.) Ltd. v. Deputy Commissioner of Income-tax 20...
01 Dec, 2022
The nonresident taxpayers are allowed ITR exemption on IFSC investments as per the notification issued by the Centr...
30 Jul, 2019
Red Herring Top 100 Asia enlists outstanding entrepreneurs and promising companies. It selects the award winners from approximately 2000 privately financed companies each year in the Asia. Since 1996, Red Herring has kept tabs on these up-and-comers. Red Herring editors were among the first to recognize that companies such as Google, Facebook, Kakao, Alibaba, Twitter, Rakuten, Salesforce.com, Xiaomi and YouTube would change the way we live and work.
Researchers have found out that organization using new technologies in their accounting and tax have better productivity as compared to those using the traditional methods. Complying with the recent technological trends in the accounting industry, Enterslice was formed to focus on the emerging start up companies and bring innovation in their traditional Chartered Accountants & Legal profession services, disrupt traditional Chartered Accountants practice mechanism & Lawyers.
Stay updated with all the latest legal updates. Just enter your email address and subscribe for free!
Chat on Whatsapp
Hey I'm Suman. Let's Talk!