Section 80D of The Income Tax Act can provide a great opportunity to save taxes on the amount you spend on health insurance. Read this post to know in detail about Section 80D deductions.
Today, health issues and lifestyle diseases are on the rise. So, an adequate health insurance policy is vital to financially safeguard your family against various health issues or medical emergencies. Moreover, you can also claim an income tax deduction for the money spent on health insurance.
Section 80D
Under section 80D of the IT Act, 1961, some deduction from the taxable income is allowed for the amount you spend on health insurance and health care of your dependent family members, including your parents.
But note that Section 80D deductions only apply to the old tax regime. Hence, if you select the new tax regime, then you’ll be unable to take advantage of this section.
Payment Types Eligible for Section 80D Deductions
Taxpayers can avail of Section 80D deductions for the following types of payments.
- Premium paid towards health insurance cover for self, spouse, children, or dependent parents.
- Healthcare expenses of parents who are senior citizens and are not covered under any medical insurance scheme.
- Expenses up to Rs. 5000 towards preventive health check-ups anxnr.
Different Tax Brackets Under the Old Tax Regime
Following are the income tax slabs for the financial year 2021-22 (The assessment Year 2022-23) under the old tax regime.
Income Tax Rate (For Individuals Below the Age of 60)
Up to Rs. 2.5 Lakhs- Nil.
Between Rs. 2.5 Lakhs and 5 Lakhs- 5%.
Between Rs. 5 Lakhs and Rs. 10 Lakhs- 20%
Above Rs. 10 Lakhs- 30%
Deduction under Section 80D- Rs. 25,000
Income Tax Rate (For Individuals Between the Age 60-80)
Up to Rs. 3 Lakhs- Nil.
Between Rs. 3 Lakhs and Rs. 5 Lakhs- 5%.
Between Rs. 5 Lakhs and Rs. 10 Lakhs- 20%.
Above Rs. 10 Lakhs- 30%.
Deduction under Section 80D- Rs. 50,000.
Income Tax Rate (For Individuals Above the Age of 80)
Up to Rs. 5 Lakhs- Nil.
Between Rs. 5 Lakhs and Rs. 10 Lakhs- 20%.
Above Rs. 10 Lakhs- 30%.
Deduction under Section 80D- Rs. 50,000.
As you can see in the table above, Section 80D deductions are unaffected by the changes in the income tax slabs. Rather, it depends on the age of the insured (see the last row). But how to know the maximum deduction allowed under Section 80D when each family member belongs to a different age group? Well, all the scenarios are covered in the next section.
How Much Deduction Can Be Claimed Under Section 80D?
The following table illustrates tax deductions available under Section 80D under different scenarios.
| Particulars of the Insured based on age | Maximum Tax Deduction Allowed Under Section 80D | Total Permissible Deduction (in ₹) | |
| Immediate Family (You, your spouse, and your children) | Your Parents and in-laws | ||
| Everyone in the family is below the age of 60 years. | ₹25,000 | ₹25,000 | ₹50,000 |
| You, your spouse, and your children are below 60 Years.
Your parents are above 60 Years. |
₹25,000 | ₹50,000 | ₹75,000 |
| Either of the Spouses and the parents are above the age of 60 years. | ₹50,000 | ₹50,000 | ₹1,00,000 |
The Final Word
In a nutshell, Section 80D deductions don’t depend on your income levels. Therefore, you only need to consider the age of family members while purchasing a health insurance policy and claiming Section 80D deductions. Moreover, consider the reputation of the insurance provider as well. Explore various plans offered by the insurer and select the right one for your loved ones.
