You may avail up to Rs 1 lakh deduction from taxable income u/s 80D, but subject to these conditions

To promote health insurance, the government provides tax benefits under Sector 80D of the Income Tax Act, so that people may avail costly treatment from private hospitals.

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Maximum deduction of Rs 1 lakh may be availed on health insurance premiums if both the investor as well as his/her parents are senior citizens.

To promote health insurance, the government provides tax benefits under Sector 80D of the Income Tax Act, so that people don’t face inconvenience standing in long ques of limited government hospitals and may avail costly treatment from private hospitals.

Under Section 80D, health insurance premium up to Rs 25,000 is tax deductible on the policy taken for self, spouse and children. Another deduction from taxable income up to Rs 50,000 may be availed for the premium paid on the policies taken for senior citizen parents. So, the maximum deduction of Rs 1 lakh may be availed on health insurance premiums if both the investor as well as his/her parents are senior citizens.

Full the contribution amount paid to the Central Government health scheme (CGHS) by government employees and/or on account of preventive health check-up up to Rs 5,000 are also eligible for deductions u/s 80D, but within the above-mentioned limits of Rs 25,000 and Rs 50,000.

So, up to Rs 1 lakh deductions from the taxable income may be claimed u/s 80D, but on the following conditions, which you should take care of.

You should be the proposer of health insurance policies

Tax benefit u/s 80D is available either to the proposer or the policyholder, who has actually paid the premium in the financial year under consideration. So, you should be the proposer for the health insurance policies for both you family as well as of your parents.

In case one of your parents was the proposer at the time taking the health insurance policy for them, you can’t claim tax benefit on the premium paid for the policy as you are neither the proposer nor a policyholder, even if you actually paid the premium.

Never pay premium in cash

To get the tax benefits u/s 80D, you have to pay health insurance premiums in any mode other than cash. So, you may issue a cheque or demand draft, or use net banking, debit card, credit card, bank transfer or other modes like online wallets etc to pay the premium. Moreover, you have to use your own account or card to pay the premium and not cards or account of anyone else.

In case you pay the premium in cash for whatever reason or someone else pays the premiums for you, the health insurance company won’t issue the 80D certificate to facilitate you to get the tax benefit.

So, to avail the tax benefit u/s 80D, you have to keep it in mind that you should actually pay the health insurance premiums in any mode other than cash for the policies, in which you are either the proposer or a policyholder or both.

This article was first uploaded on February twenty, twenty nineteen, at eight minutes past four in the afternoon.