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All you need to know about tax benefit on health insurance premiums

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Apart from financial support during medical emergencies, tax deductions can also be listed as another important advantage of purchasing health insurance. The Government of India provides tax concessions on health insurance premium under Section 80D of the Income Tax Act.The tax benefits on your health insurance premium would help in reducing your taxable income and tax liability. This premium can be calculated using a health insurance premium calculator.

Eligibility to claim tax deductions on health insurance

Under Section 80D, you would be eligible to claim the tax deductions on the health insurance premium, if -

1. You are an individual who has purchased a health insurance policy for yourself, your spouse, and your dependent children on parents
2. You are a member of a HUF (Hindu Undivided Family)

Tax benefits on health insurance premium under Section 80D

Let us check out the quantum of deduction available under various scenarios.

1. Individual
   • If no one in your family is above the age of 60 years, the deduction that can be claimed is up to Rs. 25,000. If you have paid health insurance for parents who are below the age of 60 years, then the tax deduction claimed can be up to Rs. 25,000. So, the total deduction can be up to Rs. 50,000.
   • If one of your parents is over 60 years of age, you can avail of a tax benefit of up to Rs. 50,000 for the health insurance premium paid for your parents. In addition, you can avail of a tax benefit of up to Rs.25, 000 for the health insurance of self, spouse, and dependent children. So, by this, you would be able to avail a tax benefit of up to Rs. 75,000 in a financial year.
   • If anyone of your family member, i.e., self, spouse, or children is above 60 years of age, then you can claim a tax benefit on health insurance up to Rs. 50,000. Moreover, if both your parents are above 60 years of age, then you get a tax benefit of up to Rs. 50,000 for the health insurance paid.So, the total tax benefit that can be claimed would be up to Rs. 1, 00,000 in a financial year.
2. Hindu Undivided Family (HUF)

• If you are taking health insurance for any member of the HUF, then you can claim a tax deduction under Section 80D.
• This tax deduction would be Rs. 25,000 if the age of the insured member is below 60 years of age and would be Rs. 50,000 if the age of the insured member is above 60 years.

Scenario	Premium paid for family	Premium paid for parents	Tax deduction under Section 80D
Individual and parents below the age of 60 years	Rs. 25,000	Rs. 25,000	Rs.50,000
Individual and family below 60 years but parents above 60 years	Rs. 25,000	Rs. 50,000	Rs. 75,000
Both individual/family and parents above 60 years of age	Rs. 50,000	Rs. 50,000	Rs. 1,00,000
Members of HUF	Rs. 25,000	Rs. 25,000	Rs. 25,000

Tax deduction on health insurance premium for senior citizens

Senior citizens can claim a tax deduction of up to Rs. 50,000 towards the health insurance premium. Senior citizens can claim a tax deduction of up to Rs. 50,000, even if they do not have health insurance. This amount can be claimedonly for the expenses made for medical check-ups and treatment.

Tax deduction on health insurance premium –How it works

Tax deduction on health insurance premiums can be claimed while the filing of the Income Tax returns.

1. While filing your ITR form, you can see the ITR column where you can select ‘80D’ for claiming the deductions for health insurance premium paid.
2. There will be a drop-down menu from which you would be able to select the condition under which your deduction would be claimed.The options available in this drop-down menu would be -

• Self and family
• Self where age >60 years and family
• Parents
• Parents whose age>60 years
• Self, family, and parents
• Self, family, and parents above 60 years
• Self(>60 years of age), family and parents above 60 years

Conclusion

So, purchasing health insurance is not just a financial shield to protect against unfortunate events but also a tax-saving tool. However, with the avenues open for tax saving, you must file your ITR carefully before the due date, keep your documents handy, and always furnish the correct information.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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