Section 80D Deduction | Health Insurance Tax Benefit | Save Tax under Section 80D


If we talk about tax savings, then Section
80C is most popular among Indians. Under which, there is a provision of tax deduction
up to Rs. 1.5 lakh. But do you know that apart from this, there
are many other tax saving options also. One of them is Section 80D. Today we will discuss this topic in our video. But
before that a quick reminder. If you want to watch more videos like this,
then click on the subscribe button and press the notification bell So let’s get started. Did you know that India is also known as Diabetic capital of the world? And the way the number of cardiac patients are increasing day by day, soon it may become cardiac capital as well. It surely takes lakhs of rupees in the treatment of cardiac problems. But, if we talk about other minor diseases,
when the cost of hospitalization plus the cost of medicines is included, the bill goes into lakhs. Maybe that’s why the government encourages you to take health insurance by providing tax deductions under Section 80D. Let’s understand about Section 80D in detail. Under Section 80D, one can avail of a tax deduction on the premium paid for Health Insurance. This health insurance can be for you or for your family. Family means you, your children, and your parents. On the other hand, your relatives or your
siblings are not covered under this. But you must consider these two points regarding this. Firstly, you can only get deductions for the amount spent over your children and parents, when they are not independent but dependent on you for their expenses. Secondly, if you are above 80 years of age, and you don’t have any active insurance policy, then you can claim a tax benefit upto Rs.
30,000 per annum. Now, let’s talk about how much tax can be
saved under section 80D. Depending upon the number of your family members
covered and their age, you can avail a tax deduction between Rs. 25,000 to Rs. 1
lakh under this section. As per rules, if you purchase insurance for
you and your family, which don’t include parents, then you can claim for the tax deduction for the premium paid up to Rs. 25,000. If your family includes even a single person whose age is above 60, the limit you can claim is Rs. 50,000 Apart from this, if you purchase health insurance for your parents, then this limit is Rs. 25,000 for non-senior citizen parents and it is Rs. 50,000 for senior-citizens. This is over and above your family limit. Let’s understand this through an example. Aarav is a 32 year old software engineer, who is earning Rs. 12,00,000 per annum. He purchased health insurance policy for himself,
his wife and daughter, which has an yearly premium of Rs. 15,000. Apart from this, he has also purchased a separate insurance policy for his 70-year-old mother, which has a premium of Rs. 33,000. So, Aarav can avail the tax benefits in this
way. Firstly, Aarav is 32 years old and has purchased the yearly insurance policy of Rs. 15,000, As he can claim a maximum tax deduction of Rs. 25,000 under Section 80D. In this case, he can claim the whole deduction of Rs.15,000. Secondly, he has purchased a policy for his mother, which has an annual premium of Rs. 33,000 As the age of his mother is 70 years, which means she is a senior citizen and the maximum limit of premium deduction is less than Rs. 50,000. So in that case, Aarav can claim the whole amount of Rs. 33,000 for tax deduction. In this way, by combining the deduction of
both the policies i.e. Rs. 15,000 and Rs. 33,000 he can avail a deduction of Rs. 48,000. As Aarav’s yearly income is Rs. 12 lakh
rupees and he falls under 30% tax slab. And after purchasing the policy, he is claiming
a tax deduction of Rs. 48,000. In this case, let’s calculate how much tax he is saving. First, let’s take out 30% of Rs. 48000,
that is RS.14,400 Apart from that, 4% cess is also applicable
with 30% tax, which is Rs. 600. In this case, Aarav can save a total of Rs. 15,000. Now, if in the same case, had the age of her mother would have been less than 60 years, then for purchasing the policy of Rs. 33,000, he could have claimed deduction of Rs. 25,000. and a total of Rs. 40,000. Following the same calculation, he saves Rs. 12,400. Now let’s tell you about the additional
benefits covered under section 80D. If your expenditure on the premiums of health
insurance for yourself and your family is less than the maximum limit, then you can
also claim a tax deduction up to Rs. 5,000 under Section 80D for preventive health check-ups. Let’s understand this with an example of Aarav. As we discussed, Aarav paid a premium of rupees
15,000, which is less than the upper limit of Rs. 25,000 Now if Aarav has undergone any health check-up
up to Rs. 5,000 or less, then he can also claim that amount for tax deduction. So as you saw, you can avail of a tax deduction
up to Rs. 1,00,000 under Section 80D. But that doesn’t mean that you should purchase
any random health insurance plan. Because health insurance provides you safety
and you are spending money on it, so make sure that you purchase the plan that suits
your requirements. And, if you need any help in choosing the
right plan for you, then click on the link below and download ETMONEY. This app recommends the right plan as per your needs. Plus, you can buy that plan in just a few
minutes and that too with zero paperwork.

1 thought on “Section 80D Deduction | Health Insurance Tax Benefit | Save Tax under Section 80D

  1. Thid could not have been explained better. The video and tables and infographics are so nice and so easy to understand.
    Liked, subscribed, notifications enabled.

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