Health Insurance – Section 80D
- Author :
- TATA AIG Team
- Published on :
Looking for information on tax benefits under Section 80D for Health Insurance? You have come to the right place as in this blog by Tata AIG we explain to you in detail everything about Section 80D in a Health Insurance Plan.
Medical emergencies can arrive unannounced. Hence, it’s always better to be safe than sorry. With a health insurance plan in place, you can be assured that you will get coverage for your medical expenses. However, even though medical insurance plans are a must-have for every individual, several people are still unsure or ignorant about the benefits of a health insurance plan.
To make the purchase of insurance more attractive, the Indian government encourages everyone to buy a health insurance policy to allow a person to avail of tax deductions under Section 80D of the Income Tax Act. So, what is this Section 80D all about? Let’s find out below.
What is Section 80D of the Income Tax Act, 1961?
Every individual in India or a Hindu Undivided Family (HUF) can claim health insurance tax benefits from their total annual income for paying the medical insurance premiums. In addition, under Section 80D of the Indian Income Tax Act, you can claim a deduction for the critical illness plans/riders and the top-up health insurance plans.
The best part is that you can avail of this tax benefit not only for medical insurance for yourself but also for the ones you buy for your spouse, your parents, or your children. Simply put, Section 80D medical insurance will allow you tax deductions for the money you would spend on maintaining your and your family’s health with an individual health insurance or family health insurance policy. Hence, this could be an essential part of your personal finance and tax planning.
Eligibility Criteria for Availing Tax Benefits Under Section 80D for Health
If you wonder whether or not you are eligible to avail of tax benefits under Section 80D medical insurance, you can find it out here.
If you are an individual taxpayer or fall under the HUF in the Indian Income Tax Act, you will avail of Section 80D health insurance tax benefits for:
- Your spouse
- Your parents
- Your children
A company or an organisation is not eligible to claim Section 80D deduction under the Income Tax Act in India.
What Are the Payments Eligible for Availing Tax Benefits Under Section 80D?
An individual or HUF in India can claim health insurance tax benefits under Section 80D medical insurance for payments made for:
- Premium payment for a health insurance plan for self, children, spouse, parents, or other dependants in cash or another mode.
- Whatever expenses are incurred during any kind of preventive health check-ups.
- Expenses made as a contribution to the Central Government Health Schemes or any other such schemes notified by the Indian government.
- Medical expenses incurred for a senior citizen who is not covered under any valid medical insurance plan or scheme.
Tax Deductions Under Section 80D Limit
The tax deductions allowed under Section 80D under the Indian Income Tax Act are ₹25,000 per financial year. However, for senior citizens, the Section 80D limit is ₹50,000.
In the table below, we have captured the different slabs of deduction available for the financial years 2020-21 and 2019-20 for an individual taxpayer in the country under different scenarios:
|Various Life Scenarios||Premiums Paid||Section 80D Deduction|
|Individual, Spouse, Children||Parents|
|When Self and Parents are below 60 years||₹25,000||₹25,000||₹50,000|
|When Self and Spouse below 60 years but Parents are above 60 years||₹25,000||₹50,000||₹75,000|
|When Self, Spouse, and Parents are all above 60 years||₹50,000||₹50,000||₹1,00,000|
|Individuals Belonging to HUF||₹25,000||₹25,000||₹25,000|
How to Buy a Health Insurance Policy?
Now that you are aware of the health insurance tax benefits under Section 80D, you should buy medical insurance immediately if you do not have one. First, however, it’s prudent to keep a few things in mind to make the right pick. There are several factors to consider while choosing a health insurance plan. Here are a few pointers that should help:
-Choose an Affordable Option
When choosing a health insurance plan, make sure that it’s affordable. This is important because you should have any preconceived notions as only the costlier medical insurances will provide you with the right coverage. Budgeting is hugely important while choosing a health scheme. Remember, you will have to make timely payments of your premium, and hence, it shouldn’t be at the cost of your regular lifestyle. Keep in mind your income, your family size, other requirements, and then go for a health insurance plan that works.
-Choose One with the Right Coverage
Always go for an insurance plan that will secure you against all health odds. It should cover pre and post-hospitalization costs, daycare expenses, other related illnesses, transportation charges, etc. If you choose medical insurance for your family, consider their health conditions before choosing the coverage. Compare health insurance plans based on their coverage and costs, and research thoroughly to choose one that will cater to all your needs.
-Choose a Plan with Renewability Option
When buying a health plan, make sure that you check for its renewability options. This is important because you will require insurance coverage mostly during the later years of your life. So, it’s prudent to choose a medical insurance cover that will provide you with a lifetime renewability option. It’s better to not opt for a plan that comes with a limited renewability feature.
-Check the Network Hospitals Covered
Once you have chosen a few options to go forward with, you need to check whether the health insurance plan has your preferred doctors and hospitals in their network coverage or not. To ensure that you can avail of the best treatment options for yourself and your family, always choose an insurer that offers a wide range of network hospitals. This way, you will be able to get quick, convenient, and the best cashless claim settlements.
-Choose an Insurer with High CSR
While researching the insurer options for your health insurance policy, try to find out about their past CSR or Claim Settlement Ratios. Always go for a health insurance provider that has a high CSR. This will ensure that your future claims will not go unanswered or unresolved, no matter what. Also, you will know that your money is in safe hands.
Now that you are aware of the pointers that you need to keep in mind when selecting health insurance plans for yourself and your family, you will be able to avail yourself of better coverage options. Also, having knowledge about the Section 80D deduction criteria will make you aware of the health insurance tax benefits that you can get under the same.
Disclaimer / TnC
Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.