Income tax in Budget 2025: Why section 80D limit for health insurance premium must be raised and allowed in New Tax Regime
One of the long-standing demands of the general public is an increase in section 80D tax deduction for health insurance premium paid, under the old tax regime. However, section 80D of the Income Tax Act, 1961 which allows a tax deduction up to a specified limit for medical insurance premium has remained unchanged for many years. For general citizens below the age of 60 years, the limit for 80D deduction was raised from Rs 15,000 to Rs 25,000 in budget 2015 and it has not changed since then. For senior citizens the deduction limit was raised from Rs 30,000 to Rs 50,000 in the budget 2018.#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;}
Budget with ET
Rising Bharat may need to take center stage for India’s game-changing plans
Will Indian Railways accelerate to global standards with govt’s budgetary allocation?
Budget 2025 to catapult India's domestic manufacturing to a global scale
A strong case for an increase in the limit under section 80D in the upcoming Budget 2025 can now be made considering the significant rise in healthcare costs recently.
What is the current section 80D tax deduction limit?
If you are below the age of 60, you can claim up to Rs 25,000 deduction for paying health insurance premium. The health insurance policy can be taken for coverage of policyholder, his/her spouse and their dependent children.An additional deduction for insurance (premium) for parents is available up to Rs 25,000 if they are less than 60 years of age. If the parents are 60 years old or above, the deduction amount could go up to Rs 50,000. From FY 2015-16 a cumulative additional deduction of Rs 5,000 is allowed for preventive health checkups. However, this deduction of Rs 5,000 is limited to the umbrella limit of Rs 25,000 or Rs 50,000 depending upon the age of the parents.
Do note you will not be able to claim this deduction in the new income tax regime. Only if you opt for the old tax regime then you can claim deduction under section 80D.
Artificial Intelligence(AI)
Java Programming with ChatGPT: Learn using Generative AI
By - Metla Sudha Sekhar, IT Specialist and Developer
Artificial Intelligence(AI)
Basics of Generative AI: Unveiling Tomorrows Innovations
By - Metla Sudha Sekhar, IT Specialist and Developer
Artificial Intelligence(AI)
Generative AI for Dynamic Java Web Applications with ChatGPT
By - Metla Sudha Sekhar, IT Specialist and Developer
Artificial Intelligence(AI)
Mastering C++ Fundamentals with Generative AI: A Hands-On
By - Metla Sudha Sekhar, IT Specialist and Developer
Artificial Intelligence(AI)
Master in Python Language Quickly Using the ChatGPT Open AI
By - Metla Sudha Sekhar, IT Specialist and Developer
Marketing
Performance Marketing for eCommerce Brands
By - Zafer Mukeri, Founder- Inara Marketers
Office Productivity
Zero to Hero in Microsoft Excel: Complete Excel guide 2024
By - Metla Sudha Sekhar, IT Specialist and Developer
Finance
A2Z Of Money
By - elearnmarkets, Financial Education by StockEdge
Marketing
Modern Marketing Masterclass by Seth Godin
By - Seth Godin, Former dot com Business Executive and Best Selling Author
Astrology
Vastu Shastra Course
By - Sachenkumar Rai, Vastu Shashtri
Strategy
Succession Planning Masterclass
By - Nigel Penny, Global Strategy Advisor: NSP Strategy Facilitation Ltd.
Data Science
SQL for Data Science along with Data Analytics and Data Visualization
By - Metla Sudha Sekhar, IT Specialist and Developer
Artificial Intelligence(AI)
AI and Analytics based Business Strategy
By - Tanusree De, Managing Director- Accenture Technology Lead, Trustworthy AI Center of Excellence: ATCI
Web Development
A Comprehensive ASP.NET Core MVC 6 Project Guide for 2024
By - Metla Sudha Sekhar, IT Specialist and Developer
Marketing
Digital Marketing Masterclass by Pam Moore
By - Pam Moore, Digital Transformation and Social Media Expert
Artificial Intelligence(AI)
AI-Powered Python Mastery with Tabnine: Boost Your Coding Skills
By - Metla Sudha Sekhar, IT Specialist and Developer
Office Productivity
Mastering Microsoft Office: Word, Excel, PowerPoint, and 365
By - Metla Sudha Sekhar, IT Specialist and Developer
Marketing
Digital marketing - Wordpress Website Development
By - Shraddha Somani, Digital Marketing Trainer, Consultant, Strategiest and Subject Matter expert
Office Productivity
Mastering Google Sheets: Unleash the Power of Excel and Advance Analysis
By - Metla Sudha Sekhar, IT Specialist and Developer
Web Development
Mastering Full Stack Development: From Frontend to Backend Excellence
By - Metla Sudha Sekhar, IT Specialist and Developer
Finance
Financial Literacy i.e Lets Crack the Billionaire Code
By - CA Rahul Gupta, CA with 10+ years of experience and Accounting Educator
Data Science
SQL Server Bootcamp 2024: Transform from Beginner to Pro
By - Metla Sudha Sekhar, IT Specialist and Developer
Why the tax deduction under section 80D for health insurance premium paid should be increased
According to Aarti Raote, Partner, Deloitte India, the rising cost of medication and the increased incidence of critical ailments in recent times always takes a toll on the finances of the taxpayers in addition to the mental pressures. “Hence, health insurance is definitely recommended. Most taxpayers opt for health insurance to address any surprises.”Raote says, “However, post COVID there is a surge in the health insurance costs and the need for larger coverages has increased. Given the serious situation at hand, the current deduction limit for 80D doesn’t meet the financial burden on the individuals, especially those supporting elderly parents or inlaws.”
Raote further adds: “Hence it is advisable that the Government should extend this deduction to the taxpayers opting for Simplified Tax Regime but also revisit the deduction limits as the current limits for health insurance premiums are inadequate. A higher deduction would alleviate the financial burden for the taxpayers and help provide increased relief for them.”
Rahul Charkha, Partner, Economic Laws Practice (ELP), says, “Over the last few years, health insurance premiums have increased by more than 25% annually for some age slabs. With the increase in awareness and hike in premium, it would be judicious to provide an aggregate deduction of up to Rs 2.5 lakh for health insurance premium and medical expenditure (the prevailing provisions provide for a maximum deduction of Rs 1 lakh under the old tax regime). This would provide impetus to the taxpayers who will have more security and gain tax advantage.”
Also read: Have high hopes from GST cut on health, life insurance? Here's why a drastic fall is unlikely to benefit policyholders
Shilpa Arora, Co-Founder & COO, Insurance Samadhan, "As we move closer to the Union Budget 2025, more industry stakeholders are hoping for reforms in the health insurance regime. In this regard, consumers and health insurance companies are seeking tax relief and an increase in exemption limits to make policies more accessible. The prevalence of lifestyle disorders such as diabetes and hypertension, the rising cancer cases, and the soaring medical inflation, which currently stands at 14%, are making it challenging to manage medical expenses. Typically, to ease this financial burden, people opt for medical insurance. This makes it more crucial for the government to incentivize families to opt for higher-sum insured policies. Such policies, while requiring higher premiums, provide essential financial protection amid escalating healthcare costs. Currently, under Section 80D of the Income Tax Act, customers can get a deduction of up to Rs 25,000/year for health insurance premiums, while for senior citizens, the limit can exceed Rs 50,000/year. Additionally, consumers can opt for an extra Rs. 5,000 claim for preventive health checkups."
Arora says: "However, I believe the government should increase the Section 80D tax exemption limit for health insurance under the old tax regime. Elevating the current limits will provide more tax relief to customers and encourage consumers to invest in health insurance. Such a move would be in the interest of consumers and help them safeguard their financial interests against rising medical inflation rates and rising premium costs. Interestingly, GlobalData suggests that the Indian health insurance sector will grow at a CAGR of 12.8% and reach 2 trillion by 2028. This growth could be driven by factors such as rising financial awareness, increased medical inflation concerns, and the availability of tailored insurance products."
Why does the health insurance premium tax deduction need to be extended to the new tax regime also?
According to Charkha, tax deduction for health insurance premium is more of an economic centric than tax saving(s) tool considering the fact health costs have arisen. Hence a case for this deduction being given in the new tax regime makes sense.He says: “About 75% of Indians pay for medical services from their own pockets. They are not covered by any government or private health insurance schemes. The Covid-19 pandemic acted as a wake-up call after which the health insurance premiums increased substantially. The world was still recovering from the Covid-19 pandemic when the threat of HMPV outbreak raised alarms globally. The changing lifestyle resulting in unanticipated health hazards to those even in their prime has raised health concerns across the nation. In situations such as these, health insurance plays a major role in providing financial protection and access to healthcare facilities. To encourage taxpayers to make a provision for health emergencies, it is imperative that health insurance deductions be provided under the new tax regime as well.”
#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;}
This story originally appeared on: India Times - Author:Faqs of Insurances
