80D Calculator

The importance of health and the extent of expenses tagging along with it were made evident post-covid. To help manage your finances better, availing of health insurance is a huge boon to an individual.

Additionally, another boon comes in the form of tax deductions on your health insurance premiums. Section 80D of the Income Tax Act, 1961 does exactly this!

Under Section 80D of Income Tax Act, 1961, the deductions allowed are for:

• Health Insurance Premiums for self, spouse, dependent children or parents in any mode other than cash,
  
• Preventive health check-ups (up to a limit of ₹5,000),
  
• Health insurance premiums for resident senior citizens who don’t have any health insurance plans, and
  
• Contribution to Central Government Health Schemes in modes other than cash.
  

 The table below explains a detailed overview on deductions for specific scenarios depending on the age of the individual:

Hindu Undivided Families (HUF) and individuals are both eligible to deduct certain expenses from their taxable income under Section 80D. A person may claim deductions on the cost of their medical expenses, health insurance premiums, and preventative health examinations for themselves, their spouse, dependent children, and their parents.

Regular health insurance costs, as well as top-up and critical illness plan premiums, all qualify for an 80D tax deduction.

The 80D tax deductible is applicable only under the Old Tax Regime and is subject to the limitations set out in the Income Tax Act of 1961.

Preventive health check-up is a mandatory annual check-up carried out by healthcare professionals to curb a person's health risk factors. It is a step towards being more pro-active and identifying health risks at an early stage.  

Under Section 80D, you can claim ₹5,000 for you and your family members, inclusive of the overall limit under preventive health check-up.

Let’s understand this with an example: Manoj’s medical premium is ₹20,000 and he availed preventive healthcare for ₹5,000. Under section 80D, he can claim up to the maximum limit of ₹25,000 (₹20,000 + ₹5,000). If Manoj’s health insurance premium is ₹25,000 and his preventive healthcare costs is also ₹5,000, then he can only claim the total limit of ₹25,000 for his premium.

In Digit's 80D Tax Deduction calculator, select:

Status: Either HUF or Individual

*A person falls under the Hindu Undivided Family status if there is coparcener ship and ancestral property, qualifying the joint family unit as HUF. In income tax, HUF is considered as a separate entity and are taxed separately. Forming a HUF is beneficial for optimizing tax liabilities and financially benefiting family members in the future as well. The income tax slab for HUF is the same as that for individual.

1. Under HUF (Hindu Undivided Family), enter:

• The health insurance premium paid.

• The health insurance premium paid for family members and/or senior citizens.

• And the medical expenditure of senior citizens.

The total eligible deduction under 80D will be computed automatically and shown on the screen.

You will then be able to see the tax deduction amount as per your health insurance premiums and expenditure.

Under Individual, enter:

• The health insurance of the family or the amount contributed to a health scheme.

• The health insurance premium amount of parents, including amount for preventative health check-ups.

• Medical expenditure of family/senior citizen members.

• Medical expenditure of parents

• And the amount of preventative health check-up (not exceeding ₹5,000)

The total eligible deduction under 80D will be computed automatically and shown on the screen.

You will then be able to see the amount of tax deduction you can claim under Section 80D.

 The above calculator is only used to enable people to have a quick and easy access to basic tax calculation.

To handle the complicated process of tax time, we have created an 80D income tax deduction calculator that helps you save money on your income tax. Digit's 80D tax deduction calculator will automatically calculate tax deductions that you can claim based on your investment.

The deduction for medical insurance premium/ medical expenses for senior citizens is applicable for Individuals and HUF taxpayers only.

Insurance can be availed for:

• Spouse

• Dependent Children 

• Parents, and

• Self

Exemptions of this deduction are:

• You cannot claim tax deduction for the premium paid by your employer for group medical health insurance.

• Premium paid on behalf of working children, siblings, grandparents, aunts or uncles, or any other relatives.

• Any other entity cannot claim this deduction under Section 80D.

• It is important to go through your tax exemptions in your policy carefully.

• It is better to avoid paying premium in cash. Although, payment for preventive health check-ups can be done through cash.

• The amount available for senior citizens' deduction can also be spent on medical expenses. 

• A Health insurance premium paid at one go allows tax benefits for the number of years of insurance cover.

• If you purchase health insurance for yourself or your parents (both of whom are elderly citizens), the maximum deduction under section 80D is ₹ 1,00,000.

• This deduction is also available to HUFs (Hindu Undivided Families) for premiums paid to cover the health of any HUF member.  

• Tax concessions under Section 80C of up to ₹1.5 lakh are in addition to those under Section 80D.