Section 80D of Income Tax Act, 1961

Tax Deductions under Section 80D

Section 80D of the Income Tax Act permits deductions on amounts spent by an individual towards the premium of a health insurance policy. This includes payment made on behalf of a spouse, children, parents or self to a Central Government health plan. An amount of Rs 15,000 can be claimed as deduction when paid towards the insurance for spouse, dependent children or self, while this amount is Rs 20,000 if the person is over the age of 60 years.

Both individuals and Hindu Undivided Families are eligible for this deduction, subject to the payment being made in modes other than cash.
 

Section 80D is further subdivided into two sub-sections, offering clarity on the benefits available to taxpayers.
 

Section 80DD: Section 80DD provides provisions for tax deductions in two cases, with the permitted deduction being Rs 75,000 for normal disability and Rs 1.25 lakh if it is a severe disability. This deduction can be claimed in case of the following expenditures.

• On payments made towards the treatment of dependents with disability

• Amount paid as premium to purchase or maintain an insurance policy for such dependent

The permitted deduction is Rs 75,000 for normal disability and Rs 1.25 lakh for a severe disability. Both Hindu Undivided Families and resident individuals are eligible for this deduction. The dependant, in this case can be either a spouse, sibling, parents or children.

Section 80DDB: Section 80DDB can be utilised by HUFs and resident individuals and provides provisions for deductions on the expense incurred by an individual/family towards medical treatment of certain diseases. The permitted deduction is limited to Rs 40,000, which can be increased to Rs 60,000 if the treatment is for a senior citizen.