All insurance plans which cover any health issues are covered under section 80D. This will include Mediclaim insurance or family floater insurance cover, critical illness and disability covers like – cancer and heart insurance plans. Additionally, one taxpayer can claim a deduction for the premium paid on the health cover of his or her immediate family – spouse, dependent kids, and parents. Under this section the tax deductions allowed are:
Deductions on the Insurance Premiums Paid:
You can claim an income tax deduction up to Rs. 25,000 every budgetary year on the medical insurance premium payments for yourself, your spouse and your children. In addition to this, if you or your spouse is a senior citizen, then the limit goes up to Rs. 50,000.
Deductions on Preventive Health Check-ups:
You can claim a tax deduction on the preventive health check-ups you take annually under Section 80D. A limit of Rs. 5,000 is provided for every budgetary year under the preventive health check-up clause in which you can claim deductions.
Deductions of Premium Payments for Parents:
Insurance premiums paid for your parents are qualified additionally for deductions up to Rs. 25,000 every year. Moreover, if your parents are senior citizens, then the maximum limit can go up to Rs. 50,000. The limit also subsumes Rs. 5,000 additionally that can be claimed under the clause of annual health check-ups for your parents.
Deductions on Premiums for Very Senior Citizens:
A person over the age of 80 years who doesn’t have any insurance policy can claim a deduction up to Rs. 50,000 every financial year towards medical treatments and check-ups. On, the other hand, if your father and mother are super-senior citizens (Above 80 years of age), then you can claim a tax deduction of Rs 50,000 towards your medical treatment for parents, medical coverage and registration of both guardians. Moreover, if the taxpayer and the parents are both above 60 years of age, the maximum deduction on taxes under this section that can be availed is 1,00,000.
Note: The premiums paid for health insurance that is availed by your siblings are not qualified for tax benefits.
Exclusions in Section 80D
Payment Mode of the Premiums: To claim tax benefits under the Section 80D, only the taxpayer must pay the health insurance premiums. If the premium amount is paid by any third-party tax benefits cannot be availed. Moreover, if the premium payments are paid in cash then the taxpayer is not eligible to get tax benefits.
Service Tax: A Service Tax of 14 percent is chargeable on health insurance premiums paid. Moreover, no tax benefits are provided on the Service Tax and CESS charges that are levied on the premium payments.
Group Health Insurance: Group health insurance policies are not eligible to claim any tax benefits under Section 80D. However, if the taxpayer chooses to make extra payments to increase the group cover than he or she can claim tax benefits on the additional amount paid.