As you start planning your financial goals for the new fiscal year, you must be researching on how to better categorise your income and save on your tax liabilities. The income tax laws in India not only encourage individuals to save on taxes but also promote healthcare and preventive medical checkups in the public. One such provision under the Income Tax Act is Section 80D, which pushes taxpayers to prioritise their health, go for regular checkups, and save tax liabilities on their income at the same time.
Section 80D of the Income Tax Act allows taxpayers to claim deductions from their taxable income on medical insurance premiums paid in the fiscal year. The deduction is also valid for purchases made on top-up health plans and critical illness plans.
The deductions include any premiums paid on insurance policies for self, spouse, dependent children, and parents. Preventive health check-ups for self and dependents can also be claimed for deduction under this section.
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To be eligible to file deductions under this section, the taxpayer needs to be either an individual or a Hindu Undivided Family (HUF). A company cannot file for deductions under Section 80D.
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The maximum deduction that can be claimed under Section 80D annually depends on the age of the individual. For people under 60 years of age, a deduction of up to Rs 25,000 per fiscal year can be filed, while the upper limit for individuals aged 60 years and above stands at Rs 50,000 per financial year. To better understand exactly how much you can claim under the section for self and other dependents, let’s take a look at this table.
Covered In Policy | Deductions For Self And Family | Deductions For Parents | Preventive Health Checkups | Overall Deduction |
Self & Family ( Under 60 Years) | Rs 25,000 | - | Rs 5,000 | Rs 25,000 |
Self, Family & Parents (Under 60 Years) | Rs 25,000 | Rs 25,000 | Rs 5,000 | Rs 50,000 |
Self, Family (Under 60 Years) & Parents (Above 60 Years) | Rs 25,000 | Rs 50,000 | Rs 5,000 | Rs 75,000 |
Self, Family & Parents (All Above 60 Years) | Rs 50,000 | Rs 50,000 | Rs 5,000 | Rs 1,00,000 |
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