By | December 12, 2022
Income Tax Benefits on Health Insurance

Income Tax Benefits on Health Insurance

We all love to enjoy double benefits from a single payment. Health insurance is also an investment that offers double benefits. Health insurance provides you with financial protection against medical emergencies, and at the same time, the premium paid for the health insurance policy is also eligible for tax benefits!

Income Tax Benefits on Health Insurance

Income Tax Benefits on Health Insurance

Health insurance policy premium provides tax benefits under Section 80D of the Income Tax Act, 1961. You can also get tax benefits for premiums paid for health insurance plans purchased for your spouse, dependent children, parents.

How much tax benefit is available from a health insurance plan?

A health insurance plan’s premium is eligible for deduction from your taxable income under Section 80D of the Income Tax, 1961.

Health Insurance Plan for Self Rs. 25,000/-
Health Insurance Plan for Self and Spouse Rs. 25,000/-
Health Insurance Plan for Self, Spouse, dependent children up to age 25 Rs. 25,000/-
Health Insurance Plan for Parents Rs. 25,000/-
Health Insurance Plan for Senior Citizens Rs. 50,000/-
Health Insurance Plan for Self, Spouse, dependent children up to age 25 and Parents Rs. 50,000/- (Rs. 25,000/- + Rs. 25,000/-)
Health Insurance Plan for Self, Spouse, dependent children up to age 25 and Parents Rs. 75,000/- (Rs. 25000/- + Rs. 50,000/-)
Health Insurance Plan for Self and Parents (All Senior Citizens) Rs. 1,00,000/- (Rs. 50,000/- + Rs. 50,000/-)

What is the maximum amount of Tax Saving available from a health insurance

The maximum amount of tax that you can save from a health insurance plan depends upon the tax bracket you fall under:

5.20% Rs. 1,300/-
20.8% Rs. 5,200/-
31.2% Rs. 7,800/-

This tax saving is over and above the tax amount that you save by making an investment in eligible instruments as listed in Section 80C of the Income Tax Act, 1961.

Health Insurance Benefits of Senior Citizens

A health insurance plan for senior citizen parents is more expensive than a health insurance plan available for you or your family. A senior citizen’s health insurance plan is also expensive as the insurance providers also take into account the pre-existing ailments that they may already be suffering from or suffering from.

Keeping this important fact in mind, the Government of India, in its budget for the year 2018, has decided to provide some major relief to the senior citizens of the country, who are already stressed by high medical bills and cannot afford to buy a health insurance plan. . Or continue with their current plan.

Section 80D, as newly amended, allows deduction of medical expenses incurred by senior citizens. This deduction can be claimed by a senior citizen or their children if they are paying medical expenses for their senior citizen parents.

Tax benefits on preventive medical check-ups

Maximum amount Rs. 5,000 annually spent on preventive health check-ups within the overall limit is also eligible to claim tax deduction under Section 80D of the Income Tax Act, 1961.

What documents do I need to claim 80D deduction?

The premium payment receipt of the health insurance scheme is the only document you need to claim tax deduction under Section 80D of the Income Tax Act, 1961.

Sometimes your employer may also ask you to submit a copy of the policy document showing your name with the members covered under the scheme, their ages and your relationship with the covered members, ie, spouse, children etc.

If you are paying the premium for your parent’s health insurance policy, you should ask the insurance company for an 80D certificate stating that the premium has been paid by you. Here you have to inform the insurance company about the source of payment.

For example, a credit card in your name, which was used to pay the premium, or your bank account, which was used to pay online or by check.

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Health insurance tax benefit for senior citizens

Health insurance premiums for senior citizens are always on the higher side. Insurance companies may also be reluctant to provide medical insurance for people who are elderly or suffer from pre-existing ailments.

benefit for senior citizens

benefit for senior citizens

However, Budget 2018 has come with some relief for senior citizens who have high medical expenses and are unable to purchase health insurance policies due to pre-existing ailments or cannot afford to pay high premiums.

The budget has amended Section 80D which allows deduction for medical expenses incurred by senior citizens. This deduction can be claimed by the senior citizen himself/her children if the children are incurring medical expenses for their senior citizen parents.

Income Tax Benefits for Senior Citizens
Coronavirus health insurance

What documents do I need to claim deduction?

The only documents required to claim the deduction are your premium payment receipt and a copy of your insurance policy showing the names of family members and their relationships and ages. In case of premium paid for the parent policy, the proposer should seek 80D certificate from the insurance company detailing the payment in his name.

Important points to remember:

  • Carefully study the tax exemptions in your policy.
  • Avoid paying premium in cash.
  • Maximum deduction under section 80D is Rs. 1,00,000 if you buy health insurance for yourself or your parents and both you and your parents are senior citizens.
  • A HUF (Hindu Undivided Family) can also claim this deduction for the premium paid to insure the health of any member of the HUF.
  • To avail the deduction, the premium should be paid in any mode other than cash. However, payment for preventive health check-ups can be made in cash.
  • Benefits under Section 80D are Rs 80C tax breaks in addition to Rs. 1.5 lakhs upto.
  • The amount available for senior citizen deduction can also be spent on medical expenses.
  • A health insurance premium paid at one time offers tax benefits for the number of years of insurance cover.

Apart from protecting your pocket from health insurance medical expenses, you can get tax benefits on the premium paid for your health insurance under Section 80D of the Income Tax Act. This makes a health insurance policy a beneficial tax-planning tool that is definitely a wise investment for your future.

We hope we have answered all the questions you may have. If you have more questions, feel free to contact us. A piece of expert advice is always helpful!

How to buy medical insurance?

There are many factors to consider before purchasing health insurance. Here are some points to consider before buying any medical insurance from the point of view of claiming deduction under section 80D and other general sections:

medical insurance

medical insurance

Contribution towards health insurance should be made in schemes specified by the Central Government or any other insurance company and approved by IRDA, i.e. Insurance Regulatory and Development Authority.

Please ensure that insurance premium is paid by any means other than cash. Also, it will be very convenient if the policy offers cashless claim settlement process with sufficient number of network hospitals covered in your city. Check the list of network hospitals tied up with your insurer for cashless claim processing.

Hospital room rent and many other expenses are allowed at a certain percentage of the insurance. Therefore, it is important to choose an adequate sum assured before purchasing health insurance.

Please carefully consider the clause regarding pre- and post-hospitalization expenses. Many policies cover all expenses incurred before 30 days and after 90 days of hospitalization.

Many insurance providers have begun to include alternative therapies such as Ayurveda, Yoga, Naturopathy, Unani, Siddha and Homeopathy (abbreviated as Ayush). This can be important for many people and should be considered properly.

There are many other expenses such as lab tests, visits to specialized doctors etc. Many policies now provide a daily cash limit as compensation for such additional costs. Check the details of the daily cash limit offered as this helps to meet additional expenses that are otherwise not covered for claim settlement.

Many insurance companies provide annual health checks as an added benefit. A health check-up includes various tests and health assessments, which are necessary and helpful in the early diagnosis of any illness.

Please consider the clause of no-claim guarantee bonus every year. Many insurance providers offer a no-claim bonus which is added to your sum assured for all those years for which the policyholder has not filed a claim. This increases the claimable amount by providing additional protection. However, it should be noted that all allowable expenses like hospital room selection are linked to the basic sum assured excluding the no-claim bonus.

After the pandemic, most insurance providers offered Covid cover. However, before buying the insurance one should know the details like coverage of Covid, limit on expenses, daily cash benefits, miscellaneous charges like PPE kit, are covered or not.

Points to remember while shopping for medical insurance to claim 80D deduction

Medical insurance premiums paid for a brother, sister, grandparent, aunt, uncle or any other relative cannot be claimed as a deduction for availing tax benefits.
Premiums paid on behalf of working children cannot be claimed for tax benefit.
In case of partial payment by you and the parents, both of you can claim deduction to the extent paid by each.
Service tax and cess must be deducted from the premium amount without showing the portion.
Group health insurance premiums provided by the company are not eligible for deduction.
Premium paid through any mode other than cash is admissible for deduction. Hence premium paid through credit card or other online mode is also allowable for deduction.

Frequently Asked Questions

What is 80D Deduction in Income Tax?

As per Section 80D, a taxpayer can deduct tax on premiums paid for medical insurance for himself, spouse, parents and dependent children. Individuals and HUFs can claim this deduction. Deduction limit varies with age. A deduction of Rs 25,000 is available for self, spouse and dependent children. For insurance paid for parents below 60 years Rs. An additional deduction of 25,000 is available. If an insured, i.e. self, spouse or parent is above 60 years of age, a deduction of Rs 50,000 is allowed instead of Rs 25,000.

What is the maximum deduction under section 80D?

The maximum deduction allowed varies in different situations as follows:

Individuals for insurance premium for themselves, spouse and dependent children up to a maximum of Rs. 25,000 can be claimed as a deduction.

Individuals can claim a maximum deduction of up to ₹50,000, if paying premiums for (i) self, spouse, dependent children and (ii) parents below 60 years of age.

While individuals can claim a maximum deduction of up to Rs.75,000 including payment of health insurance premium for (i) self, spouse, dependent children and (ii) parents above 60 years of age.

Further, the maximum deduction on paying health insurance premium for (i) self, spouse, dependent children, (senior citizens above 60 years) and (ii) parents above 60 years is Rs. 1,00,000 can be claimed.

Moreover, one can also claim deduction for medical expenses incurred for the subject of senior citizens.

50,000 under certain conditions and within the limit of above interest.


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    I read your article carefully, it helped me a lot, I hope to see more related articles in the future. thanks for sharing.


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