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Section 80D Tax Benefits on Health Insurance
Nov 14, 2023

Answering Commonly Asked Questions on Section 80D’s Tax Benefits for Health Insurance

Introduction

Health insurance can act as a financial safety net in times of medical emergencies, but it also provides a major financial advantage — tax benefit on health insurance. A prominent section of the Income Tax Act, Section 80D extends benefits to taxpayers for premiums paid on health insurance policies. In this blog, we unravel the intricate details of Section 80D, its benefits, and how Bajaj Allianz's health insurance plans can be a smart choice for you.

What Is Section 80D Of The Income Tax Act?

Section 80D of the Income Tax Act, 1961 is a provision that allows taxpayers to claim deductions on premiums paid for health insurance policies for themselves and their family. These deductions can effectively reduce the taxable income, thus lowering the overall tax liability.

Deductions Under Section 80D

The deductions under Section 80D vary depending on the taxpayer's age and who they are insuring. The following table breaks down the possible deductions:  
Insured Deduction for policies taken on the life of
Individual below 60 years Self, Spouse, Children: ₹25,000
Individual below 60 years Parents: ₹25,000
Individual below 60 years and parents aged 60 years and above Self, Spouse, Children: ₹25,000; Parents: ₹50,000
Both individual and parents aged 60 years and above Self, Spouse, Children, Parents: ₹50,000 each
** Aside from the direct deductions on premium paid, Section 80D also offers benefits for preventive health check-ups. A deduction of ₹5,000 can be claimed for these check-ups within the overall limit. Furthermore, the deduction limit for senior citizens was increased to ₹50,000 in the 2018 budget, a considerable rise from the earlier ₹30,000. ** The utilisation of a health insurance premium calculator can aid taxpayers in determining the exact premium amount and the potential deductions under Section 80D.

Preventive Health Check-Up Benefits Under Section 80D

In the realm of health, preventive measures often save lives and reduce the financial burden accompanying the treatment of severe conditions. Recognizing this, Section 80D of the Income Tax Act incorporates benefits for preventive health check-ups into its provisions. Preventive health check-ups involve a series of tests and examinations to detect potential health disorders and diseases early. These check-ups can range from routine blood and urine tests to more specialised screenings for heart diseases, diabetes, and some forms of cancer. The benefit under Section 80D is that a taxpayer can claim a deduction of up to ₹5,000 per year on expenses related to preventive health check-ups. This deduction is included within the maximum limit of the deduction available under Section 80D, not over and above it. For instance, if an individual pays ₹22,000 as premium for a health insurance policy and also spends ₹5,000 on preventive health check-ups, the total deduction under Section 80D will still be capped at ₹25,000. This provision thus encourages taxpayers to proactively manage and improve their health. Not only does this lead to healthier citizens, but it also results in early detection and treatment of potential health problems, saving significant medical costs in the future. It's important to remember, though, that the ₹5,000 limit applies to all members included in the insurance policy. So, whether the check-ups are for one individual or for the whole family, the total amount that can be claimed for a preventive health check-up under Section 80D remains ₹5,000. In summary, Section 80D not only provides deductions on premiums paid for health insurance policies but also incentivises preventive healthcare. It’s a beneficial provision, promoting both financial well-being and physical health. As such, Bajaj Allianz's health insurance policy, which offer comprehensive coverage and preventive health check-ups, provide immense value to policyholders.

Who Is Eligible To Claim A Deduction Under Section 80D?

The eligibility for claiming deductions under Section 80D extends to a broad range of taxpayers. Here are the key categories of taxpayers who are eligible:
  1. Individual Taxpayers
  2. Senior Citizens
  3. Hindu Undivided Families (HUFs)
  4. Parents of Taxpayers
  5. Non-resident Indians (NRIs)
  6. Super Senior Citizens
  7. Taxpayers for Preventive Health Check-ups

What Payments Are Eligible For Deduction Under Section 80D?

Payments eligible for deductions under Section 80D are:
  1. Premiums paid for health insurance policies.
  2. Premiums paid for Central Government Health Schemes (CGHS).
  3. Payments made on preventive health check-ups.
  4. Premiums paid for health schemes introduced by the Central Government.
By understanding and leveraging these deductions under sec 80D, taxpayers can maximize the return on their health insurance policies. In conclusion, Bajaj Allianz's health insurance policies not only provide comprehensive coverage against medical emergencies but also offer tax-saving benefits under Section 80D. Such benefits make these policies a prudent financial decision.   ** Tax benefits are subject to change in prevalent tax laws. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

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