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Health Insurance and Tax Benefits – What’s the Connection?

A health insurance policy’s primary purpose is to safeguard you and your loved ones during any medical emergency. But one more benefit answers the question of why health insurance is important.

Health Insurance and Tax Benefits

This benefit is the health insurance tax benefit that you can claim. Section 80D of the Income Tax Act, 1961, ensures specific deductions on the payment of health insurance premiums. Let’s dig deeper to know more about saving tax with the help of health insurance.

Health Insurance Tax Benefits:

Under Section 80D

According to 80D of the Income Tax Act, if you have a Hindu Undivided Families (HUF) or an individual plan, you can claim a deduction for the following events:

  • Contribution to a health scheme of the central government
  • In case you have paid for a preventive health check-up
  • For the incurred expenses for the upkeep of a senior citizen (applicable even if you have kept insurance in force for the said senior individual)

You can avail of the health insurance tax benefit amount, as mentioned in the chart below:

Scenario Premium Paid (in Rs.) Deduction Under 80D (in Rs.)
Self, family, Children Parents
You and parents below 60 years 25, 000 25, 000 50, 000
Your family and you are below 60 years but parents above 60 years. 25, 000 50, 000 75, 000
You, family and parents above 60 years 50, 000 50, 000 1,00, 000
 HUF Members 25, 000 25, 000 25, 000

Under Section 80DD

In the event of maintaining a dependent with a disability, you can avail of a tax deduction of Rs 1, 25, 000. This amount can be claimed if the dependent has a severe disability. It is for the expenses incurred on nursing, rehabilitation, and the amount paid under any LIC scheme for maintenance.

Under Section 80DDB

This section covers the deduction of medical expenditure on a relative or self, to the extent of Rs 40,000. Otherwise, the amount incurred by you will be considered. The super senior citizens can claim up to Rs 1, 00,000, and a senior citizen can claim up to Rs 60 000.

Under Section 80U

This section covers deductions for anyone with a physical disability. For this section, the person is defined as disabled, with at least 40 percent disability certified by valid medical authorities. If you or your dependent suffers from any form of disability like blindness, you can claim up to Rs 75,000.

Health Insurance Tax Benefit for Married Couples

Find below the table to understand how much tax deduction a married couple can get on health insurance. It can be a group family health insurance policy or a separate plan with their respective parents.

Age Group Health Insurance Premium paid for parents by husband Premium paid for parents by wife Overall Tax deduction
All members below 60 years Rs 25, 000 Rs 25, 000 Rs 25, 000 Rs 75, 000
Parents senior citizens Rs 25, 000 Rs 25, 000 Rs 50, 000 Rs 1,00,000
All members above 60 years Rs 50, 000 Rs 50, 000 Rs 50, 000 Rs 1,50,000

You can avail of health insurance tax benefits only when:

  1. All the premiums are paid using any mode of the transaction other than cash.
  2. In the event of any parent’s demise, you can renew the remaining parent’s health insurance policy and still claim tax deductions. It will be made on the premise of premiums paid for one parent.

A comprehensive health insurance cover will ensure that you and your family are taken care of in need of the hour. Along with that, you can avail of health insurance tax benefits.

If you want to purchase a health insurance policy, opt for reliable insurance providers like Tata AIG. You can explore the various health insurance plans they provide on their website and select the most suitable policy.

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