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Taxation
Save tax on Health Insurance: Here's what you need to know about Section 80D
With the way medical inflation is on the rise, having medical insurance is non-negotiable. It not only safeguards you in times of health emergencies but also helps you save taxes. Section 80D under the Income Tax Act provides you with tax benefits when you are paying for medical insurance. Knowing about these benefits can help you save money and keep yourself and your family covered against unforeseen medical expenses.
What is section 80D?
It is a provision in the old tax regime of the Income Tax Act that allows you to deduct health insurance premiums from your taxable income. It applies to policies for yourself, your spouse, children, and parents. The government provides this to incentivise individuals to take medical insurance.
Who can avail Section 80D benefit?
Anyone filing taxes under the old tax regime can avail this benefit:
- Individuals: For policies on self, spouse, and children.
- Hindu Undivided Families (HUFs): For policies on any HUF member.
- Senior Citizens: Higher deduction limits are available if you or your parents are senior citizens.
You need to be a tax-paying resident of India to get these benefits.
How much can you save?
The amount of savings varies with your age and that of your parents:
| Who is Covered | Maximum Deduction |
|---|---|
| Self, spouse, and children (age below 60 years) | ₹25,000 |
| Parents (age below 60 years) | ₹25,000 |
| Self, spouse, and children (age below 60 years) + Parents (age below 60 years) | ₹50,000 |
| Self, spouse, and children (age below 60 years) + Parents (age above 60 years) | ₹75,000 |
| Self, spouse, and children (over 60 years) + Parents (over 60 years) | ₹1,00,000 |
This exemption is not available for those choosing the new tax regime for filing taxes.
Conclusion
Section 80D provides considerable tax relief under the old tax regime while making sure you and your family are well covered medically. So, utilise this provision to ensure a financial safety net for your family, and lower taxes.
Disclaimer: This article is for information purposes only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.
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