Health insurance is a form of insurance that covers medical expenditures incurred by an individual for long-term well-being. Ultimately, health insurance allows individuals and families to cover the high expenses of medical treatment. There are tax advantages to purchasing and having health insurance coverage. The premium amount paid for health insurance is tax deductible. Section 80D of the Income Tax Act allows you to claim tax benefits on your health insurance premiums. As a result, based on an interview with various industry experts, here’s how you can get tax breaks on your health insurance premiums.
One of the advantages of having a health insurance policy, apart from financial protection of the family, is also prudent tax planning. Premium paid towards a family’s health insurance policy is eligible for exemptions under Section 80D of Income Tax benefit though there is an upper ceiling to it. The premium for health insurance policy depends upon the sum insured, members, getting covered, and their age.
Typically, family floater policies offer coverage to entire family ~ self, spouse, dependent children, and dependent parents in a single policy. Tata AIG’s MediCare Premier family floater policy offers coverage up to INR 3 Crore sum insured and premium paid qualifies for income tax exemption under applicable provisions. One can avail tax deductions under Section 80D up to ₹1lakh for Self and Family if Eldest is above 60 years + Senior Citizen Parents
Also, customers looking for maximum tax advantage can also opt for a higher tenure policy like 2 years or 3 years, while tax deductions can be claimed for each year up to the defined limit. We are Tata AIG are offering long-term discounts on our various retail health product offerings like Tata AIG Medicare, Tata AIG Medicare Premier, and Tata AIG Medicare Plus”
Amar Ranu, Head – investment products & Advisory, Anand Rathi Shares & Stock Brokers
A health insurance policy is a product that protects you from the financial consequences of a wide range of health-related expenses, from minor illnesses and injuries to critical diseases.
As per Section 80D of the Income Tax Act, the premium paid for a health insurance policy is deductible from the taxable income. The upper limit for the deductible amount is Rs. 25,000 and can be extended to up to Rs. 50,000 for senior citizens (with effect from 1 April, 2018). This implies that the policyholder is now eligible to enjoy a deduction of up to Rs. 75,000 from the taxable income. In rare cases, when the age of both the proposer and his parents is more than 60 years, the deductible amount can extend up to Rs. 1,00,000 (Rs. 50,000+Rs. 50,000).
CA Arpit Jain, Joint MD, Arihant Capital
In many countries, including India, health insurance premiums are tax-deductible, which means that individuals can claim them as a deduction on their income tax returns. This tax benefit can help to reduce the overall cost of health insurance and make it more affordable for individuals and families.
In general, taxpayers must meet certain requirements to claim a tax deduction for health insurance premiums, such as
• The insurance must be purchased for the taxpayer, their spouse, or their dependents.
• The insurance must provide coverage for medical expenses, including doctor visits, hospitalization, and prescription drugs.
The tables below provide an overview of how much insurance premium towards your health policy qualifies for exemption under Section 80D of the Income Tax Act and the total cash benefit for individuals falling in different income brackets.
| TABLE A | Self, Family, Dependent Children | Dependent Parents | Total Tax Deduction u/s 80D |
| Individuals & Parents below age 60yrs | 25000 | 25000 | 50000 |
| Individuals & Family below age 60; but parents above 60yrs | 25000 | 50000 | 75000 |
| Individuals, Family & Parents above 60yrs | 50000 | 50000 | 100000 |
| Members of HUF | 25000 | 25000 | 25000 |
| TABLE B: Tax Benefit | Premium | % of Rebate | Tax Rebate |
| Slab Rs. 2.50 Lacs to Rs. 5.00 Lacs | 25000 | 5.20% | 1300 |
| Slab Rs. 5.00 Lacs to Rs. 10.00 Lacs | 25000 | 20.80% | 5200 |
| Slab above Rs. 10 Lacs | 25000 | 31.20% | 7800 |
For example, if you are only paying for insurance premiums for yourself and your spouse, the total deduction you can claim is ₹25,000. Now if you fall under the income slab of ₹10 lacs and above, you will save a total of ₹7,800 in taxes by claiming this deduction under Section 80D of ITA.
To claim this deduction, you will need to provide your premium payment receipt and your insurance policy copy which shows the name of the family members and their relation and age. It is important to note, to take the benefit of this deduction, the premium should be paid in any mode other than cash. Premium paid in cash will not be considered. However, the payment for Preventive Health check-ups can be done in cash.
Siddharth Singhal, Business Head – Health Insurance, Policybazaar.com
Buying a health insurance policy not just ensures a sound financial safety during medical exigency but also serves as an actual tax-saving tool. The insured person can save tax under Section 80D. Any policyholder is entitled to this tax rebate for health insurance premium paid either for self, partner, dependent children, and even for parents.
For self, partner, dependent children the maximum tax exemption is Rs. 25,000, while for parents (aged less than 60 years), an additional exemption of ₹25,000 is available. However, if the parents are aged 60 years or above, the deduction is ₹50,000 while, if both the taxpayer and parents are above 60 years, the tax exemption amount goes up to Rs.1 lakh.
Moreover, policyholders are entitled for claim deduction of Rs. 5,000 against preventative medical check-ups under Section 80D of the IT Act. This exemption is within the standard limit under Section 80D (Rs. 25,000 for self, partner and children, and ₹50,000 for senior citizen parents). Whether an individual is paying health premium for critical illness insurance or indemnity based insurance i.e. family floater plan or a senior citizen health plan or individual mediclaim policy, they are eligible to get tax rebate through Section 80D.
Sujit Bangar, Founder, Taxbuddy.com
We all are aware about health insurance benefit for tax deductions. Where we get confused are two things.
Firstly , deduction for health insurance is different from deduction under 80C bracket. This health insurance deduction is over and above 150k limit of 80C.
Secondly, we all do regular health check up. Especially, everybody amongst us has done RTPCR test once or twice. This expenditure can be claimed as deduction u/s 80 D upto ₹5,000/- . We should not mis out on this.