There are a lot of conducts in the Indian Income Tax Act, of 1961 that are meant to provide a better tax system for taxpayers with the help of some deductions. One of those brilliant moves in the tax system is the Section 80D deductions. This section allows the deduction of money spent on health insurance and for practice in maintaining health.
The deductions that are allowed under this section are:
Thanks to this provision from the government, you can claim the amount spent on insurance from your income tax. That being just a trailer for the whole movie, in this write-up, we are going to give you a clear image of Section 80D and how it works.
The restrictions under this section are pretty clear and are directly based on the age groups. To explain these restrictions clearly, you can refer to the table given below that is applied to people (insured under the policy) aged below 80 years:
|Aged Under 60 Years
|Aged Above 60 Years
|Self, Partner, and Children
|Pot: Preventive Healthcare*
Since there is no health insurance available for people over the age of 80 years, a deduction of ₹50,000 will be provided even if you have spent that money on medical treatment instead of paying the insurance premium.
Note: Speaking of eligibility, only individual people and families under the Hindu Undivided Families Act are eligible for the 80D tax reductions. A company or an enterprise cannot claim these returns.
The following are the deductions that you can claim as an individual or a HUF:
Claiming for this return is not as forward as you might think. There are some things to consider before applying for the returns. The list below consists all those points on which you must rely:
If you violate any of the points from this list, we recommend you not waste your time on applying for the tax returns as it would be a complete waste of time for you.
This pie chart shows the percentage of the population that is covered or not covered by a health insurance plan. As we can see, in the urban areas, people are more aware and have chosen to get a coverage plan. But it’s still much lower than expected.
If you are not aware of the fact that along with section 80D, there is another section that allows tax deduction in some areas, which is known as section 80C. This section has its own rules are guidelines, and the difference between both sections is evaluated below:
|Basis of Difference
|Section 80C provides deductions in several investment payments such as ULIP, PPF, ELSS, EPF, LIC premium, etc.
|Under section 80D, the tax exemptions are only allowed in health insurance payments for self, family, & parents.
|Maximum limit of tax deductions
|Up to 1.5 Lakh
|Up to 1 Lakh
|Scope of Benefits
|High scope of benefits
|Low scope of benefits
Finally, this was the complete and detailed introduction to Section 80D of the Income Tax Act of 1961. Now you know that this section provides tax exemptions for the payments made against the health insurance premium for yourself, your spouse, or your parents. Also, one thing to consider is that sections 80D and 80C are not at all the same and hold their significance and set of rules.