How to save Income-tax on Health Insurance

Owning health insurance covers your basic risk of health and secures your family. We have discussed in detail what are things to note while buying health insurance.

What’s more, the premium paid for health insurance also provides a tax benefit by reducing your taxable income and thereby your tax liability.  We are going to discuss the same here:

Deduction under section 80D of the Act

Premium paid for self, spouse and children

The premium paid towards health insurance policies qualifies for deduction under Section 80D of the Income Tax Act. The benefit is available to individuals on health insurance premium paid for self, spouse, children, and parents. Importantly, it does not matter whether the children or parents are dependent on you or not.

The quantum of tax benefit depends on the age of the individual who is medically insured.

You can claim a deduction of INR 25,000 for the premium paid for self, spouse, and children. If you and your spouse are of the age 60 and above, then you can claim a benefit of INR 30,000 for the premium paid.

Preventive Health Check-up

You can claim a deduction towards health check-up too. It is included in the above limit of INR 25,000 (or INR 30,000). Preventive health check-up of up to INR 5,000 is allowed.

Premium paid for parents

Premium paid for health insurance of parents/  guardians up to INR 25,000 is allowed. If they are above the age of 60, then you can claim a benefit of INR 50,000 for the premium paid.

Health checkup expenses for super senior citizens

Very Senior Citizens (who are above 80 years of age), can claim a deduction of up to Rs 50,000 incurred towards medical expenditure, in case they don’t have health insurance.

Things to Note:

  • We have tabulated below the maximum health insurance and medical expenses you can claim under section 80D for the year ended 31 March 2019.

  • Health insurance premiums paid in cash will not be allowed as a deduction. It has to be paid from banking channels. Health check-up of INR 5,000 can be paid in cash.
  • Premium paid for health insurance of your siblings is not allowed as a deduction.
  • *Nature of the amount spent on your senior citizens’ parents and self-family can be towards medical expenditure as well.

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