People purchase a Mediclaim plan or medical insurance policy to deal with the situation of medical emergencies. In order to provide proper treatment to themselves and their family members on time, people purchase this health insurance. But only a very few people know about medical expenses tax relief. So, today we are going to provide you with a brief idea about the medical expenses tax relief.
Table of Contents
- 1. What Is Medical Expenses Tax Relief Under Section 80D Income Tax Act
- 2. Why We Need Medical Insurance?
- 3. What Is Medical Insurance Premium?
- 4. How To Use This Section 80D In Your Better Tax Planning, Let’s Know:
- 5. What Is The Tax Provision Under Section 80D Of Income Tax?
- 6. How Much Tax Saving In Medical Expenses Tax Relief?
- 7. Exclusion in The Section 80D of Income Tax Act
- 8. Medical Expenses Tax Relief Options Other Than Section 80D:
These Mediclaim plans or Health Insurance policies not only work for you and your family in the medical emergency but also make the burden of taxes less. Income tax section 80D/Section 80D of Income Tax Act helps you in this regard by providing you medical expenses tax relief.
What Is Medical Expenses Tax Relief Under Section 80D Income Tax Act
Section 80D of the Income Tax Act, 1961 deals with tax exemption on medical insurance. Income tax rebate under section 80d allows you premiums paid for medical insurance to protect yourself and your family members.
Health insurance 80d benefit will help you get tax rebates on medical insurance premiums only. You can get discounts for family insurance or both yourself.
The maximum amount of deduction on health insurance for self and family (spouse or dependent children) is 25,000 per year. If you are a senior citizen, a maximum exemption of 50,000 per year is prescribed.
There is a maximum exemption of 25,000 per year on health insurance premium paid by parents. There is a maximum exemption of 50,000 per year on the premium payment of senior citizen parents/cashless mediclaim policy for senior citizen parents.
A quick Look
|Covered Individuals||Health Checkup Included||Exemption Limit||Total Deduction|
|Self and Family||INR 5000||INR 25000||INR 25000|
|Self & Family + Parents||INR 5000||INR (25000 + 25000)=50000||INR 50000|
|Self & Family + Senior Citizen Parents||INR 5000||INR (25000 + 30000)=55000||INR 55000|
|Self (Senior Citizen) & Family + Senior Citizen Parents||INR 5000||INR (30000 + 30000)=60000||INR 60000|
Why We Need Medical Insurance?
Most financial planners suggest that the first step in any financial plan is to have adequate health insurance. A person should take health cover first when he gets his first job. It is not only for yourself but also for your own family.
Let us know for details that you get tax benefits on the premium for health insurance. This reduces your taxable income and reduces tax liability.
(You can Also Read: Royal Sundaram Health Insurance Plans)
What Is Medical Insurance Premium?
The premium amount paid for medical insurance income tax act sections under Section 80D is eligible for deduction. Under this section, the maximum amount to be claimed can be up to INR 60,000. But it also includes several sub-limits.
Any person can claim a maximum deduction of INR 25000 on the premium amount which he has given for himself, wife or dependent children. Also, an additional deduction of INR 25,000 is also valid if premium payment has been made for parents.
If the policyholder is a senior citizen, then the deduction limit is INR 30,000.
How To Use This Section 80D In Your Better Tax Planning, Let’s Know:
Medical expenses tax relief under Section 80D of Income Tax Act and 80DDB of Income Tax is available on the expenses incurred for the treatment of the disease. Do you know how much relaxation is available under these sections and how the benefits of the discount can be availed? If not, we are telling you ways to get medical expenses tax relief on health insurance.
What Is The Tax Provision Under Section 80D Of Income Tax?
Do you know What is section 80D? Under Section 80D of Income Tax, you can get the tax of up to INR 25,000 on medical expenses for you and your family? At the same time, if you are a senior citizen you can get a discount of up to INR 30,000.
|Description||Payment of Medical Insurance Premium (Own, Wife, Child)||
Parental premium payment (in case of dependency)
Total tax rebate under section 80D
|No person should be over 60 years of age||
|Family members less than 60 and parents more than 60||
|Own and Parents Over 60 Years||
How Much Tax Saving In Medical Expenses Tax Relief?
If you are taking medical insurance tax benefits cover for yourself or your family and you are paying an annual premium of INR 25,000 then tax savings can be 10 percent, 20 percent or 30 percent. In the term of the value, it will be tax saving of INR 2,575, INR 5,150 and INR 7,725, respectively.
Indemnity and Defined Benefit Health Insurance Plan are eligible for tax benefits. Under this tax benefit, not only the indemnity plans like Individual Health Insurance Plans, which are called Mediclaim and Family Flow Plans, but also the daily hospital cash plan and Critical Illness such as Defend Benefit Plans of anyone Health Insurance Company or General Insurance Company Plans are also included.
It is eligible for tax deduction claim on the remaining amount after tax saving under Section 80C of Income Tax.
Exclusion in The Section 80D of Income Tax Act
Apart from benefits, Section 80D also has various exclusions contains-
To get tax deductions under Section 80D of the Income Tax (IT), just the citizen must make premium installments and no outsider ought to be included. Further, citizens are not subject to tax reductions if the premium for medicinal protection is paid in real money. In any case, preventive wellbeing screening is paid in real money, can get tax cuts.
GST / Service Tax
No tax benefits are applicable to service tax as well as cess expenses levied on the premium paid for the medical insurance plan. As per norms, a 14% service tax is dependent on health insurance and premium payments.
No Tax Benefit On Group Health Insurance Plan
Medical expenses tax relief under section 80D is not payable on the group health insurance plans. However, in case an additional premium is paid by the taxpayer, he or she can claim an 80D deduction on that additional amount.
Medical Expenses Tax Relief Options Other Than Section 80D:
|Name Of The Section||What Is It For||Purpose of The Section|
|Section 80C||It is for Deduction on the long term investment||Under Section 80C Income Tax Act, an individual can claim tax deduction up to INR 1,50,000 on several long term investment alternatives like PPF, ELSS, Sukanya Samriddhi Yojana, EPF, NPS, FD, NSC, SCSS, ULIP, etc.|
|Section 80CCC||It is for Deduction on a premium payment of an annuity plan of the LIC or any other insurers||The deduction in section 80CCC on any premium paid is liable to an annuity plan of the LIC or any other life insurance corporation. The maximum deduction limit of the 80CCC is up to INR 1,50,000.|
|Section 80CCD||Deduction on contribution to the pension account.||The deduction under this section is divided into 3 sections. These are Section 80CCD (1), Section 80 CCD (1B), Section 80CCD (2)|
|Section 80CCD (1)||Deduction on employee’s contribution.||Deduction under section 80CCD (1) is liable to those individuals who contribute to their annuity account. The maximum limit of deduction allowed is 10% of salary (in case there is an employee) or a total of 10% of the total income (if self-employed) or up to INR 1,50,000, whichever is higher.|
|Section 80 CCD (1B)||Deduction on NPS contribution.||The Govt. of India introduced a new section called Section 80CCD (1B), which allows an additional tax deduction of up to INR 50,000 on contributions made by the taxpayer towards them. NPS Account (National Pension Scheme).|
|Section 80CCD (2)||Deduction on the contribution of employer||Under this section, the tax deduction applies to the employer’s contribution to the employee’s pension account. The maximum exemption limit under Section 80CCD (2) is up to 10% of the salary of the employee as well as there is no money constraint on this deduction.|
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