Enjoy tax benefits of health insurance to maximise your savings under Section 80D
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Section 80D of the Income Tax Act of 1961 reduces your tax bill for health insurance and helps you save money. Enjoy tax benefits of health insurance by applying for affordable plans available on Bajaj Markets.
You can apply for them online, with the premium costs starting from ₹160 per month.
This provision of the Income Tax Act provides tax deductions on premiums paid for health insurance plans. The Section 80D tax benefits are available for individuals and Hindu Undivided Families (HUFs).
You can enjoy tax benefits on health insurance plans for yourself, your spouse, children, or parents.
These plans provide an opportunity to reduce your tax burden while taking a proactive step toward your well-being. The following types of expenses qualify for tax benefits of health insurance:
Premiums paid on healthcare plans for yourself and your family
Medical expenses incurred on treatment of senior citizens
Not everyone qualifies for tax benefits on health insurance under this provision of the Income Tax Act. Only the following entities can claim deductions under Section 80D-
Individual Taxpayers
Hindu Undivided Families (HUFs)
Carefully understand the exemptions allowed under this provision to optimise your tax liabilities. You can claim these tax benefits on health insurance for the following types of payments.
Health Insurance Premium
Claim deductions on the premium amount paid for a health insurance plan through any method other than cash.
Preventive Health Check-ups
Enjoy deductions on the cost of regular medical examinations covered under your policy.
Medical Expenses for Senior Citizens
Those over 60 years old can enjoy deductions on the cost of medical consultations, impairment aids, medicines, and more.
Contributions Made to CGHS
Enjoy deductions on the Central Government Health Scheme (CGHS) or any other notified scheme. Note that these tax benefits are not available on any payment made on behalf of your parents.
You can claim two types of tax benefits under this provision. The amount of tax benefits on health insurance premiums and medical expenses for senior citizens are as follows-
Insured Person |
Amount of Applicable Deduction |
|
Below 60 Years |
Over 60 Years |
|
Self, Spouse, and Dependent Children |
₹25,000 |
₹50,000 |
Parents |
₹25,000 |
₹50,000 |
Maximum Deduction |
₹50,000 |
₹1,00,000 |
Preventive Healthcare |
₹5,000 |
₹5,000 |
It provides tax benefits on health insurance and other medical payments for senior citizens. Here is an overview of tax regulations for those over 60 years old.
You can claim a higher deduction of up to ₹50,000 on premiums paid during a financial year
If your parent is not covered under any plan, you can still enjoy tax benefits of the same amount on medical expenses
Individuals and Hindu Undivided Families can enjoy the tax benefits of health insurance policies. Under Section 80D, HUFs can claim similar deductions as available to individual taxpayers.
Selecting the right plan provides the peace of mind that comes with knowing you are covered, no matter what comes your way. Considering coverage level will make it simple to find a plan that perfectly fits your needs and budget.
After you assess your coverage needs, compare different plans and look for their unique features. But before you zero in on a plan, choose one offering comprehensive coverage that helps minimise your out-of-pocket expenses.
For expenses incurred on preventive healthcare, you can claim a deduction of up to ₹5,000. Note that deductions available for preventive health check-ups fall within the overall limit of ₹25,000 or ₹50,000.
Claiming tax benefits can significantly bring down the cost of health insurance. Here are the modes of payment eligible for these deductions.
Health insurance premiums paid in any mode other than cash
Payments for preventive health check-ups in any mode, including cash
For a multi-year health insurance policy, the insurer consolidates premium payments into a single lump sum amount. Here is how to calculate tax benefits on health insurance.
The existing laws provide for the calculation of tax benefits proportionately for each year
The deductions will be available each year as per the deductions outlined for each financial year under Section 80D
You can enjoy tax benefits on health insurance and medical expenses of up to ₹75,000 for a dependent person with a disability. You can enjoy tax deductions of up to ₹1.25 Lakhs if the dependent person faces a disability of over 80%.
For the treatment of certain ailments, you can enjoy an exemption of up to ₹40,000 under this provision. Senior citizens can enjoy tax benefits on health insurance of up to ₹1 Lakh. The following are some of the diseases included:
Chronic renal failure
Malignant cancer
Parkinson’s disease
Dementia
HIV AIDS
Both these provisions of the Income Tax Act provide tax benefits. However, they differ from each other in many respects.
Basis |
Section 80C |
Section 80D |
Available for |
Investment instruments, Unit-linked Investment Plans (ULIPs), term insurance, etc. |
Health insurance premiums and medical expenses for senior citizens |
Limit |
You can claim a maximum amount of ₹1.5 Lakhs in a financial year |
This section allows you to claim a maximum of up to ₹1 Lakh |
Understanding tax regulations can be complex. Here are a few things to remember when claiming tax benefits on health insurance under Section 80D.
These deductions are over and above the exemption available under Section 80C
To enjoy these deductions, make payments for premiums through non-cash methods
You can enjoy tax benefits for the entire duration of insurance if you make a lump sum payment
FAQs on Health Insurance Tax Benefits
Is health insurance tax deductible?
Yes, premiums paid towards health insurance are exempted under Section 80D of the Income Tax Act, 1961.
Can I avail preventive health checkups for tax benefits?
Yes. You can avail up to ₹5,000 as health insurance tax benefits on preventive health checkups under Section 80D of the Income Tax Act.
I paid my health insurance premiums in cash. Can I avail of the health insurance tax benefits?
No. If you want to avail health insurance tax benefits, you must pay your health insurance premiums via internet banking, cheque, credit/debit card, or demand draft.
Are tax benefits available on health insurance plans that cover relatives other than spouses, children, and parents?
Ideally, the tax benefits on health insurance can be availed for premiums paid for self, spouse, children, and parents. Premiums paid for any other relative cannot be claimed for health insurance tax benefits.
Do you avail tax benefits for indemnity plan or fixed benefit plan?
Health insurance tax benefits can be availed irrespective of the type of policy you purchase.
Can I get tax benefits from health insurance?
As discussed, the deduction of ₹25,000 can be claimed for the insurance of the spouse, dependent children, or self. An additional health insurance tax benefit of up to ₹25,000 is allowed if you are paying the premium for your parents if they are less than the age of 60 years, and ₹50,000 if parents are above 60 years of age. If the parents and the taxpayer are both above the age of 60 then a deduction of ₹1 lakh can be claimed.
What are the income tax deduction limits for senior citizens?
As a senior citizen, you can claim up to ₹50,000 of health insurance tax benefit, however, if you are a senior citizen and are paying the premium for your parents, who are also above 60, your tax deduction limits stand at ₹1 lakh.
What are the factors to consider while claiming a health insurance income tax deduction under Section 80D?
To begin with, keep in mind that if you have paid the insurance premium in cash, you would not be able to claim any health insurance tax benefit. Also, the claim can be for the financial year in which the premium has been paid. You should have the payment receipt when making a claim.
Do health plans offer tax benefits?
Yes. You can claim the premiums paid towards your health plan under Section 80D of the Income Tax Act, 1961. To understand the tax benefits available under health insurance in detail, you can head over to Bajaj Markets.
