Is Term Insurance Covered Under 80D? Here’s the Clear Answer

Most taxpayers in the country buy insurance policies for the tax-saving benefits they provide. But, the confusion comes around when policyholders wonder if term insurance also falls into this category of tax-saving, especially for Sections 80C and 80D.

So let’s find an answer to this commonly asked question, “Is term insurance covered under 80D?”

What Is Section 80D?

Section 80D is related to tax deductions on health insurance premiums along with some medical expenses.

It covers aspects like health insurance premiums for oneself, spouse and children (your immediate family), health insurance premiums for parents, as well as preventive health check-ups.

Is Term Insurance Covered Under 80D?

To answer this question simply, no, term insurance is not covered under Section 80D. This is because this section is only for medical and health-related insurance. Term insurance is a life insurance product, and hence, not applicable.

Where Can You Claim Tax Benefit on Term Insurance?

Even though term insurance might not be covered under Section 80D, you can still claim benefits through other deductions available.

1. Section 80C: You can get a maximum deduction of up to Rs. 1.5 Lakh per year on term insurance premiums under this section.
2. Section 10(10D): The death benefit received by the nominee of the term insurance policy is completely tax free.

Common Mistake to Avoid

A common mistake people do is try to claim term insurance along with health insurance under Section 80D. This can lead to issues and faults in ITR filing and tax notices. So, make sure you claim the term insurance deductions under the right section.

Takeaways

So, if you’re wondering, “Is term insurance covered under 80D?” the right answer is that it is not. Term insurance policies are eligible for deductions under Section 80C, not 80D. Knowing this can help you claim tax benefits optimally and efficiently.