Section 80D offers tax breaks on health insurance premium paid for self, spouse, children and parents. You can avail of tax breaks at the time of filing returns, even if you have missed out on claiming these while submitting tax-saver investment proofs to your employer

Besides section 80C instruments such as equity-linked saving schemes (ELSS), tax-saver fixed deposits and employees’ provident fund contribution, section 80D, too, is a highly popular avenue for reducing your tax burden.

Salaried tax-payers should ideally claim tax breaks - that is, if they have chosen the old, with-exemptions tax regime - while submitting investment proofs in the months of January and February.

This ensures that your employer does not deduct excess tax. If you missed the deadline for filing investment declaration, however, you can claim refund for excess tax deducted while filing your income tax return before July 31.

Read on to understand the tax benefits you can avail of under section 80D.

Health insurance premium paid for self, spouse and kids
Section 80D offers tax deductions of up to Rs 25,000 on health insurance premiums paid for self, spouse and children. This is the maximum deduction you can claim under this section, if you are under 60 years of age.

This limit is applicable to the aggregate health insurance premiums that you pay across multiple health policies, including critical illness plans. If you have purchased a multi-year health policy – that is, you are paying premiums for, say, two years at one go, ensure that you claim the deductions proportionately. “Many end up claiming the multi-year health insurance premium paid at one go. It should be split over the period for which the coverage will be in force,” says Chetan Chandak, Director, TaxBirbal.

Pay parents’ premium, claim higher deductions

If you also pay your parents’ premiums, you will be eligible for an additional tax sop of Rs 25,000. If they happen to be senior citizens, this ceiling will be Rs 50,000. So, an individual who takes care of health insurance premiums for herself, her spouse, kids and elderly parents can claim deductions of up to Rs 75,000 under section 80D.

Higher 80D deductions for senior citizens

If you are a senior citizen over the age of 60 and own health insurance policies, the cap on deductions for you is higher at Rs 50,000. And if you are also paying premiums for your parents’ policies, you will be eligible for tax deductions of up to Rs 1 lakh. For instance, if you are 61 and are taking care of the health insurance premiums of your parents who are, say, 88 or 90 years of age, both would fall in the senior citizen category. Therefore, the maximum deduction that you can avail of would be Rs 1 lakh.

Deduction on preventive healthcare expenses

It is a healthy practice to undergo medical check-ups at least once a year. And if you suffer from chronic ailments such as diabetes or hypertension, you ought to be more regular with monitoring your health parameters. It will also entitle you to tax deduction under section 80D up to Rs 5,000, within the overall limit.

“Many tax-payers often forget to claim this deduction. It is a good practice to preserve the receipts though you do not need to submit the documents along with your income tax returns,” says Chandak. Your parents’ health check-ups will also ensure similar tax breaks.

“The limit of preventive health check-ups is Rs 5,000, within the overall 80D limits. However, some taxpayers assume this is over and above these limits. People should remember that payments made through the cash mode will not be eligible for deduction,” says Bhavesh Shah, Senior Partner with chartered accountancy firm Hasmukh Shah & Co.

No health insurance? Avail of tax benefits on medical expenses
The tax benefits under this section are not confined to health insurance premiums. If you are a senior citizen, but are not covered under any health insurance policy, you can claim deductions on actual health expenses incurred during the year, subject to the overall 80D limit of Rs 50,000.

If your children are paying for these expenses, they can claim these spends as deductions from their taxable income. “Again, the condition here is that the payment should have been made in any mode other than cash. Ensure that there are bank transactions and receipts to prove that you have made the payments towards your parents’ healthcare expenses,” says Chandak.