Tax benefit on health insurance

Nov 27, 2021

A health insurance policy is not just a great way of protecting you and your family from unforeseen medical expenses, but also a very effective tool to save taxes.

Yes, you heard that right. Buying Health Insurance can serve dual benefits. You not just get health cover that would pay your hospital bills, medicines, etc., but would also help you save money by reducing your tax outgo. So, let’s see how it works.

Health insurance tax benefit

The premium paid for any health insurance policy reduces your annual taxable income as you can claim income-tax deduction on that amount. And reduced taxable income means reduced tax liability for that particular financial year.

What’s even better is that you can claim income-tax deduction on not just the premium paid for your own policy, but also for that of your spouse, children and parents.

Under Section 80D of the Income-Tax Act, 1961, insured citizens under the age of 60 can avail a tax deduction of up to Rs 25,000 from taxable income in a financial year on health insurance premiums paid for self, spouse and dependent children.

Furthermore, if the age of the policyholder is 60 years or more, the deduction limit increases to up to Rs 50,000 in a financial year on health insurance premiums paid for self, spouse and dependent children.

Health insurance tax benefit for premium paid for parents

You can also claim an additional tax benefit of up to Rs 25,000 for the health insurance premium paid for your parents aged below 60 years, over and above the Rs 25,000 benefit for premium paid for self, spouse or children.

In case your parents are above 60 years of age, then the limit of additional benefit increases to Rs 50,000 per annum.

Possible scenarios on exact tax benefits on health insurance

If you are under 60 and paying premium just for self, spouse and children and not for parents: You can claim deductions on premiums of up to Rs 25,000 per annum
If you are above 60 and paying premium just for self, spouse and children and not for parents: You can claim deductions on premiums of up to Rs 50,000 per annum
If you are under 60 and paying premium for your parents who are also under 60: You can claim deductions on premiums of up to Rs 50,000 per annum
If you are under 60 and paying premium for your parents who are above 60: You can claim deductions on premiums of up to Rs 75,000 per annum
If you are over 60 and paying premium for your parents: You can claim tax deductions on premiums of up to Rs 1 lakh per annum to cover yourself, spouse, children and elderly parents.

Additional medical insurance tax benefits

As per provisions of Section 80D, you are entitled to tax benefits of up to Rs 5,000 on your annual preventive health check-up. The Rs. 5,000 limit is included within the overall personal deduction limit (of Rs 25,000/Rs 50,000 depending on the age of the insured) for health insurance premiums
As per provisions of Section 80DD, you can claim income tax deduction on medical expenditure incurred on any dependent having disability of up to Rs 75,000 per annum. In case of severe disability, one can claim up to Rs 1.25 lakh as deduction in a single financial year
As per Section 80U, if you are yourself a person with disability, you may claim the same deductions as available to a dependent with disability under Section 80DD, depending on the degree of disability
According to Section 80DDB, if you or any of your dependents have any specified diseases such as neurological disorder, malignant cancer, AIDS, chronic renal failure or hematologic disorders, then you can claim deduction up to Rs 40,000 in a year on medical expenditure made on the treatment of these diseases. If you or your dependent is a senior citizen, then deductions can be up to Rs 1 lakh per annum

Points to remember while availing medical insurance tax exemption

• To avail the benefit of income-tax deduction, one must note that the premium payment has to be done either through a cheque or credit card and not by cash • The health insurance premium that you pay must be from the taxable income applicable for the year you offer for tax. • You cannot claim income-tax deduction for group health insurance policies. Only individual health insurance policies are covered under Section 80D • Health insurance benefits under Section 80D are available only to individuals and Hindu Undivided Families (HUFs) and not corporates.

Disclaimer: The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale.

Recent Blogs

Health Insurance

6 Healthy Habits For Families

The key to long-term health is to get the entire family involved. Right from making healthy food choices to leading an active lifestyle – incorporating healthy habits in your daily lifestyle can be simple and practical when everyone in the family is working towards the same health goals. Over here we discuss 6 healthy habits for families. You can add these habits into your daily routine to ensure your family’s good health. 6 Healthy Habits for Families Eating a healthy diet, together as a family The easiest of all family eating habits to cultivate is eating together. In today’s hectic world, eating together may be a challenge, but it’s worth making the efforts. There are several benefits of eating together. Eating together will help everyone in your family stick to scheduled meal times. Combine this habit with a healthy diet. Make a variety of healthy food choices, preferably food made at home so that family members, especially children do not look for junk food. Make meal prep a fun activity For family health benefits, it is essential to lead by example.Make healthy food choices so that your children can follow suit. A great way to promote healthy eating habits is to invite your children to be part of the cooking process. Help them choose the recipe and shop the ingredients. This will go a long way in inculcating healthy food choices in children. Have no-phone zones Apart from instilling good and healthy family habits and practices with regards to meals, it helps to turn meal hours into exclusive family hours with no interruptions. Having no phone zones at the dinner table and in the bedroom can encourage your family members to get moving and spend less time sitting. Encourage your kids to play outside. Planning fun activities like play board games and treasure hunts with your children can prove to be highly rewarding. Be more active as a family Staying active as a family doesn’t have to be boring! You can let every family member choose one activity for every week. From taking strolls to doing yoga together, from biking to swimming, many fun-filled activities can help you and your family burn some calories, relieve stress, while forming healthy family habits and practices. Practice hand hygiene As a family, make sure everyone follows hand hygiene. Wash hands after going to the restroom, before preparing food, after touching a pet, changing a diaper, blowing your nose, coughing, or handling garbage. You can also make a 20-second song so that children thoroughly wash their hands. Do not skip medical tests The importance of keeping track of your health cannot be emphasised enough. By undergoing regular medical check-ups you can help your family make informed health care decisions. It can help you catch health problems in the early stages and make lifestyle changes accordingly. Do include dental and eye checkup for yourself and your children in the annual medical checkup. To reap family health benefits, it’s important to take the right precautions, at the right time and make the right changes to avoid the most common health illnesses Why is family insurance a must? Illnesses don’t come knocking on the door. So, it only makes sense to have a backup plan in case you or your family member falls sick or needs hospitalisation in case of an accident or a health condition. With medical expenses skyrocketing, a health insurance policy is the best protection cover for a family. A comprehensive health insurance plan will give you that peace of mind regarding your family’s health and your financial well-being. Disclaimer: The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale.

Health Insurance

10 Worst Diseases That Smoking Can Cause

Smoking causes diseases but it is one of the most preventable causes of death worldwide. Every puff of a cigarette exposes the body to many harmful chemicals which can cause serious health problems. As awareness of these risks increases, so does the importance of having a reliable health insurance plan to help manage the financial burdens associated with these diseases.

Health Insurance

12 Foods With More Vitamin C Than Oranges

Vitamin C, also known as ascorbic acid, is an essential nutrient that plays a vital role in maintaining overall health. It is a powerful antioxidant that helps protect cells from damage caused by free radicals. Additionally, vitamin C is crucial for the growth, development, and repair of all body tissues. It aids in the formation of collagen, absorption of iron, and the proper functioning of the immune system.

Health Insurance

20 Foods High in Vitamin A: A Guide to Boosting Health Through Diet

Vitamin A is a vital nutrient that plays a key role in maintaining overall health, supporting vision, immune function, skin health, and more. As a fat-soluble vitamin, vitamin A exists in two main forms: retinoids (found in animal products) and carotenoids (found in plant-based foods). Retinoids are readily usable by the body, while carotenoids must be converted into the active form of vitamin A.