The Section 80D basically deals with tax rebates on the medical insurances. Under this, an individual can avail tax deductions on the premiums paid for a medical insurance policy for self & a close family member.
Eligibility for Tax Benefits u/s 80D
You can avail the tax deduction under section 80D if you have paid any premium on mediclaim policy under section 80D taken for:
- Your spouse
- Dependent children
- Your parents (parents need not be dependent on you)
A Hindu Undivided Families can also claim tax rebates under the section 80D. The Premium payments should be towards the medical insurance of an HUF member only and the tax deduction is allowed up to the maximum permitted limit of the act.
Maximum Deduction Limit u/s 80D
Deduction under this section is available to an individual or a HUF. A deduction of Rs. 25,000 can be claimed for insurance of self, spouse and dependent children. An additional deduction for insurance of parents is available to the extent of Rs 25,000 if they are less than 60 years of age or Rs 50,000 (has been increased in Budget 2018 from Rs 30,000) if parents are more than 60 years old.
Therefore, the maximum deduction available under this section is to the extent of Rs. 100,000
From FY 2015-16 a cumulative additional deduction of Rs. 5,000 is allowed for preventive health check up to individuals.
Types of Deduction
There are four different types of deductions that you can claim u/s 80D. They are:
- Tax deduction on health insurance premium paid for you & your family
- Tax deduction on health insurance premium paid for your parents
- Tax deduction on preventive health checkup expenses
- Tax deduction on medical expenses of super senior citizen.
No tax benefit on cash payment
Medical insurance premium should be made through online banking, a cheque, draft, debit or credit cards, etc. Tax reduction is not accessible for cash installments of the premium. In any case, installments for preventive health checkup can be paid in cash.
FOR FURTHER DETAILS CONTACT US.