Jagoinvestor

April 15, 2019

How much tax benefit can be claimed u/s 80D? (Rules + Limits)

Are you clear about the tax-saving which you can do when you pay health insurance premiums every year? You will be glad to hear that it’s over and above sec 80C.

Yes, it comes under a separate section called section 80D!

What is section 80D?

Health Insurance policies have become very famous in the last 10 yrs and to encourage it, the govt gives tax benefit when you pay the premium for yourself, your family or your parents

Section 80D defines all the rules and limits related to health insurance premium payment and tax saving.

what is section 80D of Income Tax Act, 1961

How much can you claim under section 80D?

One can claim a deduction of premium amount on health insurance of self + family (spouse + dependent children below 18 yrs.) and parents. If one pays a health insurance premium of his brother or sister then he/she will not be able to claim a tax deduction. To make it more clear, I have mentioned the list of people who will come under this benefit –

  1. Self
  2. Spouse
  3. Dependent Children (below 18 yrs.)
  4. Parents

How much you can claim Tax benefit u/s 80D?

  1. You can claim a maximum Rs. 25000 of the deduction for premium paid on health insurance of you, your spouse and children (under the age of 18 yrs.), if you are below 60 years
  2. The same amount of Rs. 25000 you can claim for deduction of premium that you pay for your parents (father+mother).

And if the age of you or your parents is above 60 years then the limit will increase to Rs. 50,000/- in each case. In the above limits, exemption of Rs. 5000 for yearly health check is included.

For getting a clear understanding of the calculation part you can refer the info-graphic given below.

these are the tax benefits u/s 80D

image on 80D exemption limit

Let us now understand this through some examples –

Case 1 – Ram (35 yrs.) with a spouse and 1 kid + parents (mother 55 yrs. and father 57 yrs.)

In case 1, Ram pays a yearly premium of Rs 15000 (for self+spouse+1 kid) and Rs 34000 (both parents). So now let us see how much exemption Ram can claim u/s 8oD.

As self + family exemption limit is Rs 25000 and Parents exemption limit is Rs 25000. Then Ram can claim exemption of Rs 40,000 (15000 + 25000) u/s 80D.

Case 2 – Rakesh (48 yrs.) with a spouse and 2 kids + parents ( father 75 yrs.)

In case 2, Rakesh pays a yearly premium of Rs 32000 (for a self+spouse+2 kids), Rs 63000 (for father) and Rs 8000 (preventive medical check-up). So now let us see how much exemption Rakesh can claim u/s 80D.

As self + family exemption limit is Rs 25000 and parent (senior citizen) exemption limit is Rs 50,000. So, Rakesh can claim exemption of Rs 75,000 (25000 self + 50,000 parent). As Rakesh has already exhausted his self exemption limit so he won’t be able to claim his preventive medical check because preventive medical check is already included in the self exemption limit.

2 Benefits into 1

I think getting tax deductions on health insurance is a wonderful thing. Health Insurance in itself is a very important financial product most people should buy and you are also getting some tax benefits on it. So, do buy health insurance for yourself, your family and parents to protect your wealth and save tax.

Let us know your views in the comment section about this article.

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22 Comments
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Deepthi
Deepthi
5 years ago

Thank you for the information

Pulak Kumar
Pulak Kumar
5 years ago

I have a query, I want to take health insurance for myself and parents. However, my parents too have their own health insurance. Will it create conflict of interest while tax saving?

Pulak Kumar
Pulak Kumar
Reply to  Jagoinvestor
5 years ago

Thanks for advice.

Chetan
Chetan
5 years ago

Very informative article, can you please confirm if I can claim for my parents if they are living on pension and filing their tax return however their tax liability is almost none so in case I pay their medical insurance then can I claim in my return.

P Kumar
P Kumar
5 years ago

Sir,

Can I club multiple health insurance premiums (one provided by my company where I pay premium for my dependents and another one taken by me separately) as long as the claimed premium (clubbed) is within the max limit mentioned above?

Thanks,
P Kumar

P kumar
P kumar
Reply to  Jagoinvestor
5 years ago

Thank you very much

Prashant
Prashant
5 years ago

very good article again Manish . very well explanined & clear about the tax saving under 80D

Seetharama Nadoor
Seetharama Nadoor
5 years ago

NRIs are not eligible to claim this, EVEN for the payment paid for their parent’s insurance, am I right?

D.S.Sawhney
D.S.Sawhney
5 years ago

Preventive check up for spouce and its limit

vijay mendiratta
vijay mendiratta
5 years ago

Tell us more about what all is covered by ‘ Yearly Helth Checks ‘ with examples

Jayesh
Jayesh
5 years ago

In your signature style… Once again a very informative article written in a simple style. Thanks for enlightening.

Deepak Jindal
Deepak Jindal
5 years ago

Sir, Thanks for your Article.

Preventive medical check-up 5000 limit is per person or it is only 5000?

If I paid 5000 for my spouse preventive medical check-up and 5000 for my father, so what amount will be available for the deduction if there is no premium paid for health insurance.