Medical Insurance Deductions for FY 2018-19 & AY 2019-20 Under Section 80D

Emergencies can occur at any point of time in life. We never know when we might get involved in one, especially a medical emergency. Thus, it’s always advisable to buy a medical insurance as it’s good to be safe than sorry. Medical insurance is a must have for all. Our government encourages us to buy an effective medical insurance as it not just protects us against uncertain medical emergencies but also helps us to avail tax deductions under Section 80D. There’s no denying the fact that a sufficient health coverage will safeguard you and your dependents during financial crisis arising due to hospitalization or critical illness accidents or treatments. In addition to this, medical insurance also offers tax benefits to you. For tax deductions under the Income Tax Act, you are allowed to claim a deduction of up to 25,000 based on

health insurance premium paid. This health insurance premium paid should be for you, your spouse, and your dependent children. In case, there’s any chance that you or your spouse is a senior citizen i.e., 60 and above, then this limit goes up to 30,000.

This below chart will explain the limit on tax deduction under Section 80D of the Income Tax Act for the financial year 2018-2019 and AY 2019-2020 -

  • Tax Deduction On Preventive Health Check-Ups –

You can get tax deduction on preventive health check-ups yearly. Inside the limit of Rs. 25,000, you can also claim expenses incurred for preventive health check-ups i.e., up to 5,000.

  • Deduction On Medical Insurance Premium Paid for Parents –

Every financial year, you can get a tax deduction of up to Rs. 25,000 on the medical insurance paid for parents. If your mother or father is a senior citizen, then the maximum limit goes up to 30,000 a year.

  • Deduction on health insurance premium for senior citizen –

Every financial year, senior citizens can claim a deduction of up to Rs. 30,000 towards medical check-ups and treatments.

  • Deduction limit under Section 80D –

You can claim tax benefits on the health insurance premiums paid for family and your parents. Your family includes your children and spouse. The deduction limit is as follows –

  • Deduction under Section 80DD –

You are allowed to claim a tax benefit of up to Rs. 75,000 based on the expenses that you might have suffered for the treatment of a dependent with disability. These expenses include medical treatment, nursing, training, rehabilitation of a dependent, etc. Dependent can be your spouse, children, siblings or parents. So all you have to do is to submit a supporting medical certificate.

  • Deduction under Section 80DDB –

You can get a deduction of up to Rs.1,40,000 for the medical expenses incurred for specified illnesses. These ailments include chronic renal failure, cancer, Parkinson infection, etc.

  • Deduction under Section 80U of the Income Tax Act –

As per section 80U of the Income Tax Act, a person with disability can claim tax benefits of up to Rs. 75,000. This limit can increase up to Rs. 1.25 Lakh.

What are the exclusions under Section 80D of the Income Tax Act?

As mentioned before, to avail tax benefits under this section, you must pay health insurance premiums. Remember, tax payers are not eligible for any kind of tax benefits if they make premium payments in cash. Although, you can get tax benefits if you are making payments for preventive health check-ups through cash. Besides, here’re the two most important exclusions-

  • Service Tax Charges: Service tax is chargeable on health insurance premiums paid. So tax payers are not liable to get any kind of tax benefits on service tax that is imposed on the health insurance premium paid.

  • Group Health Insurance: A group health insurance policy is not liable to offer any tax benefits. Although, if tax payers wish to enhance the group cover by making extra premium payments, then they can claim deductions on it.

On the whole, every individual can claim a deduction under Section 80D of the Income Tax Act for their health insurance. Besides, if you are looking for an affordable comprehensive health plan online, then check for Royal Sundaram health insurance @ to get a policy instantly without any paperwork.