How to Fill Schedule 80D in ITR: A Comprehensive Guide

Section 80D of the income tax offers a deduction on the premium paid for a health insurance plan or money spent on maintaining your health in a financial year. The deductions of Section 80D ITR are applicable for:

• Health insurance plan premiums are paid for spouses, dependent children and self.

• Health insurance plans premiums paid for parents, whether dependent or not.

• Medical expenditures incurred for parents, whether dependent or not.

• Medical expenses incurred for dependent children, spouse and self.

The deductions allowed under Section 80 D of the Income Tax Act are mentioned below table:

Also Read: Section 80D: Deductions for Medical & Health Insurance

Under Section 80D of the Income Tax Act, health insurance policies taken by individuals for themselves or their families are available for deduction.

The maximum deduction amount for this is ₹25,000. However, for senior citizens whose age is 60 years or more, the maximum deduction amount will be ₹50,000.

Medical Insurance Premium: Parents

Individuals can also claim a deduction on the health insurance plan premium paid for parents under Section 80D. The maximum deduction amount is ₹25,000; however, if the parents are senior citizens, the deduction amount is ₹50,000.

Preventive Health Checkup

Preventive health check-ups are not just a formality. They are a proactive approach to your health. These check-ups, usually done by a general practitioner or physician once or twice yearly, are aimed at identifying any potential health issues at an early stage.

The deductions introduced for these check-ups are a way to encourage people to take charge of their health. The maximum deduction amount for preventive health check-ups is ₹5,000.

Also Read: Preventive Health Check-Ups and Tax Deductions

Medical Expenditures: Senior or Super Senior Citizens

This is for senior citizens' medical expenditures such as consultation fees, impairment aid, medicines, etc. The maximum deduction amount for this is ₹50,000.

Contribution to CGHS Scheme

Under this, contributions to the central government health scheme or any other notified scheme for self or family members are available for deductions. The maximum deduction amount is ₹25,000. Furthermore, contributions made by parents are not eligible for deductions.

Now, you might be wondering how to fill 80D in ITR. The process can seem daunting and challenging, but remember, you are not alone. Below is a step-by-step guide to help you fill out 80D in your ITR.

Step 1: Gather All the Documents

Before initiating the filing process, it is crucial to gather all the documents. The documents that are needed to fill 80D in ITR are:

• The health insurance policy documents for self, children, parents and spouse.

• Proof of payment for the health insurance premiums.

• All the receipts for payment of medical expenses.

Step 2: Compute Deductions Allowed

Computing the deduction under Section 80D is also crucial since this section has certain conditions and limits. The eligible deductions breakdowns are listed below:

Health Insurance Premiums

• Any health insurance policy premiums payable to self, spouse, or dependent children are eligible to receive tax deduction benefits.

• In addition, individuals can claim a deduction on health insurance premiums paid for parents, irrespective of whether they are dependent or not.

• The upper limit for the deduction for health insurance premiums for self, dependent children and spouse is ₹25,000. However, for senior citizens, it is ₹50,000.

This means that if an individual pays a health insurance premium of ₹35,000 for 3 years, he can claim deductions of ₹25,000 while filing the income tax return if his age is below 60.

Medical Expenditures

This is a welfare initiative for senior citizens who are 60 years and above and reside in India and are unable to obtain health insurance.

A deduction of up to ₹50,000 is obtained for medical expenditures incurred. However, this deduction is not applied if individuals maintain health insurance coverage.

Step 3: Fill Out Schedule 80D

After calculating the deductions and gathering all documents, you need to complete Section 80D. Below are the steps to complete Schedule Section 80D:

• Go to the ITR e-filing portal and log in using your credentials.

• Next, select the ITR forms, either ITR-1 or ITR-4, based on your preferences.

• Now, next, scroll down to the "Gross Total Income" and then click on "Tax Deductions."

• It will redirect to the page that has questions related to tax deductions.

• Scroll down to the question "Are you eligible to claim deductions for health insurance premium payment?" click on that and submit your answer "Yes".

• In the next tab, fill out the Schedule 80D accurately. Enter the health insurance premium and expenses on preventive health check-ups in the financial year.

• Once you have submitted the details, verify it and then click on the "Submit" option.

• The income tax department will authenticate the details and adjust your taxable income.

Let us understand the schedule Section 80D in ITR by example:

Person X has purchased a health insurance plan for himself, his dependent children and his spouse by paying a premium of ₹30,000. He also purchased health insurance for his parents by paying a premium of ₹20,000. Further, the medical expenses incurred for his parents were ₹40,000 during the financial year.

Now, the Schedule 80D deductions would be as follows: the maximum deduction for health insurance premiums for self, dependent children and spouse is ₹25,000. The deductions for the parent's premiums and medical expenses incurred is ₹50,000.

Total expenses made by person X = ₹30,000 + ₹20,000 + ₹40,000 =₹90,000

Total deductions claimed by person X = ₹25,000 + ₹50,000 = ₹75,000

This means that person X has made expenses of around ₹90,000, but at the time of filing his income tax return, he can claim deductions of around ₹75,000.

• Any premium paid for a health insurance plan in cash is not eligible for deductions under Section 80D. The deductions are only valid for premiums paid by cheque or digital mode.

• If an individual does not pay the health insurance plan premium on time or if there is a default, then it will not be eligible for deductions.

• If the employer pays the premium of a medical insurance plan for group health insurance, the premium will not be eligible for deductions.

• The health insurance policy premium paid for independent or working children, grandparents, siblings, aunts, uncles, etc., is not eligible for deductions under Section 80D.

• The Section 80D benefits of the Income Tax Act are in addition to the tax benefits available under Section 80C.

• Furthermore, Hindu Undivided Families can also claim tax deductions under the Income Tax Act, which lowers the family's overall tax liability.

• Paying a medical insurance premium in full can offer long-term financial benefits for the entire duration of the policy.

• It is important to review tax exemptions included in your health insurance plan to understand the benefits you are entitled to completely.

• The preventive health check-up payment can be made in cash; however, the premium payment should be made in digital or cheque mode to avail of the tax benefit.

• Monitor the income tax department website regularly to see if tax regulations have changed or been modified.

Section 80D of the Income Tax Act is crucial as it offers deductions on health insurance policy premiums paid during the financial year. Besides reducing tax liability, a health insurance plan also safeguards individual financial assets during medical crises.

With the right medical insurance coverage, individuals can seek top-notch medical care in the authorised hospital without disturbing their finances.

TATA AIG is a reputed insurance provider that offers various health insurance plans tailored to individual needs. Whether you are opting for health insurance for senior citizens, family plans, or more, we got you covered.

In addition, we offer various benefits, such as COVID-19 coverage, AYUSH coverage, ambulance coverage and more, to enhance protection. Additionally, we have wellness programs designed for our policyholders to keep them fit and healthy.

Knowing all about the intricacies of Section 80D is crucial to maximising the health insurance plan premium deduction while filing income tax returns. This is a crucial section of the Income Tax Act that helps in maximising potential savings.

However, while filing the income tax return, taxpayers need to follow the income tax regulation carefully to leverage benefits.

Also, a late income tax return can invite penalties and late fees from the income tax department. Further, if you have any difficulty in filing an income tax return, it is best to consult with a professional tax expert or accountant to learn about the tax regulations.