Is Home Insurance Covered Under Section 80C of the Income Tax Act?

Posted on: Jul 2, 2024 | 3 mins | Written by: HDFC ERGO Team

Is Home Insurance Covered Under Section 80C of the Income Tax Act?

Tax deductions are an important part of financial planning. This is how they help individuals maximise their savings. Several insurance policies, like a health insurance policy, are tax-deductible. It means the specific premiums that you pay for your health insurance policy are also eligible for a tax deduction. Now, the question is whether your home insurance is tax deductible or not? We can find this answer only by aligning its specifics with Section 80C of the Income Tax Act. This article will discuss in detail about property insurance policies in India, and whether or not these can be included under 80C.

What is Section 80C of the Income Tax Act?

Section 80C of the Income Tax Act allows expenditures and investments to be exempted from your income tax. You can claim deductions of up to Rs. 1.5 lakh under Section 80C if you plan your investments across different financial assets, like PPF, NSC, ELSS, etc. This, thereby lowers your tax liability.

As a taxpayer, you can claim deductions under Section 80C. Yet, its deduction cannot exceed Rs 1,50,000.

Is My Home Insurance Deductible Under 80C?

No, or home owners insurance is not included in Section 80C of the Income Tax Act in India. Section 80C usually allows for deductions on various investments and expenses that help reduce your taxable income. Hence, renters insurance premiums are not the eligible deductions under this section.

Here is why have home insurance is not included in 80C:

• Purpose:

Section 80C deductions encourage savings and investments. Home insurance is an expense that protects your property. It is not an investment or a saving tool.

• Personal Use:

Property insurance benefits the homeowner directly by protecting their property. Section 80C deductions focus on expenses that benefit the taxpayer in the long run.

Other Considerations

There are some scenarios where a portion of your renter's insurance premium might be tax-deductible indirectly:

• Home Loan with Insurance:

If you have a home loan and purchased loan protection insurance (LPI) bundled with it, the premium paid towards LPI can be tax-deductible under Section 80C. Yet, this deduction applies only to the LPI component of the premium.

• Working from Home:

If you use a dedicated space in your home for business purposes and have a homeowners insurance policy that covers that space, you might be eligible to deduct a portion of the premium as a business expense.

Conclusion

Although Section 80C is a significant section of the Income Tax Act, it does not cover your home insurance. Make sure to check out the considerations we discussed above to check if a portion of your property insurance falls under the section.

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

Is home insurance tax deductible for landlords?

Here’s How Investing in Residential Property Helps Save Tax

Have to Rent? Here’s How to Save Tax on Your Rent Payments.

Comprehensive Guide to Tenant Insurance