Tax Savings Under Section 80D - Health Insurance

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Section 80D of the Income Tax Act provides deductions for premiums paid towards "Health Insurance policies" and preventive health check-ups. This deduction is available to individuals and Hindu Undivided Families (HUFs).

Eligibility Criteria:

The taxpayer can claim a deduction for the premium paid for self, spouse, children, and parents.
Parents can be dependent or independent, but children must be dependent to claim the deduction.

Deduction Limits:

For Self (Less than 60 years of age), Spouse, and Dependent Children: Up to ₹25,000 per year.
For Self (60 years or older), Spouse, and Dependent Children: Up to ₹50,000 per year.
For Parents (Less than 60 years of age): Up to ₹25,000 per year.
For Parents (60 years or older): Up to ₹50,000 per year.
If both taxpayer and parents are of 60 years or above: Maximum deduction can be up to ₹1,00,000 per year.
You can take the policy from these "Health Insurance Companies"

Preventive Health Check-up:

Deduction of up to ₹5,000 for preventive health check-ups is allowed within the overall limit of ₹25,000 or ₹50,000(For Senior Citizen) in 80D.
This health check-Up can be used either for self+spouce+dependant_child or for Parents.

Conditions:

Payment should be made by any mode other than cash to claim the deduction for health insurance premium.
Payment for preventive health check-ups can be made in cash.

Health Expenses / Medical-Expenses:

Payment should be made by any mode other than cash to claim the deduction for health expenses.
Health Expenses for Self+spouse+Dependant_children and for Parents
It includes your Physician Consultation Fees, medicines purchased, hospital Bill including room rent. Payment receipt is must for all
This also comes in 80D only for which Maximum deduction can be up to ₹1,00,000 per year as seen above.
Condition: If you have not claimed these expenses from your "Health Insurance Company" then only you can take this "Tax Exemption".

Example Calculation:

Mr. Sharma, aged 45, pays ₹18,000 as health insurance premium for himself, ₹12,000 for his wife, and ₹20,000 for his parents (both above 60 years). He also spends ₹4,000 on preventive health check-ups for Parents. The total deduction he can claim under Section 80D is calculated as follows:

Self and Spouse: ₹18,000 + ₹12,000 = ₹30,000 (limited to ₹25,000)
Parents: ₹20,000 (limited to ₹50,000 as they are senior citizens)
Preventive Health Check-up: ₹4,000 (within the limit of ₹50,000 for Parents)

Total Deduction: ₹25,000 (self and spouse) + ₹20,000 (parents) + ₹4,000 (preventive check-up) = ₹49,000

Other Exemptions for health is in Section 80 DDB and section 80 DD