Definition
Section 80D
Section 80D of the Income-tax Act allows a deduction for health insurance premiums paid for oneself, family and parents, subject to limits.
Under Section 80D (in the old tax regime), an individual can claim a deduction for health insurance premiums for self, spouse and children, with an additional limit for parents, and a higher limit where the insured is a senior citizen. A portion can also cover preventive health check-ups.
The deduction incentivises buying health cover and is a key tax reason Indians purchase mediclaim policies. The new tax regime, however, does not allow most such deductions, so the benefit depends on which regime the taxpayer opts for.
Related terms
- Critical Illness CoverCritical illness cover pays a lump sum on first diagnosis of a listed serious illness such as cancer, heart attack or stroke, regardless of treatment cost.
- Co-PaymentCo-payment is a clause requiring the policyholder to bear a fixed percentage of every admissible health claim, with the insurer paying the rest.
- Sum Insured (Health)Sum insured is the maximum amount a health (or general) insurer will pay for claims in a policy year, acting as the ceiling on indemnity.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.