Tax Benefits on Health Insurance

Know in detail about how you can claim tax deductions on health insurance premiums.
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3 mins
20 July 2023

Health insurance acts as a great financial backup to tackle unforeseen medical expenses that may drain your savings. But along with financial security, health insurance also offers tax benefits, boosting your savings. This article will provide a detailed overview of the tax benefits of health insurance. Also, read on to know things you need to claim for tax exemption under Section 80D of the Income Tax Act.

What are the tax benefits of health insurance?

The Indian Government provides tax benefits to encourage more people to purchase health insurance policies and protect themselves from rising healthcare costs. The Indian Income Tax Act of 1961 allows for tax deductions on premiums paid for health insurance policies under Section 80D. This means that policyholders can claim tax deductions for the premiums paid under their health insurance policy.

Things to consider when claiming tax exemption under Section 80D of the Income Tax Act

The following points will help you claim tax exemptions against your health policy smoothly:

Premium payment: To claim tax benefits under Section 80D, policyholders must pay the health insurance premium through a cheque, demand draft, or online banking.

Eligibility criteria: Policyholders must ensure that they meet the eligibility criteria for claiming the tax benefits under Section 80D.

Age criteria: The age of the individual or their parents play a vital role in determining the tax benefits.

Policy document: It is essential to keep a copy of the policy document that reflects the premium payment details to support the tax deduction claim.

Income tax slabs FY 24-25 have been revised to reflect changes in the tax structure and benefit eligible taxpayers accordingly.

A comprehensive view on income tax deductions for health insurance

Here a quick look at the income tax deductions for health insurance policies in India.

Category

Tax deduction

For self and family (everyone below 60 years)

Rs. 25,000

For self, family, and parents (everyone below 60 years)

Rs. 25,000 + Rs. 25,000

For self and family (everyone below 60 years) and senior citizen parents

Rs. 25,000 + Rs. 50,000

For self and family (eldest member above 60 years) and senior citizen parents

Rs. 50,000 + Rs. 50,000

Health insurance covers medical expenses and reduces taxes, saving you up to Rs. 31,200* under Section 80D of Income Tax Act, 1961.

What documents do I need to claim a tax deduction?

To claim tax deductions for health insurance premiums under Section 80D, policyholders must maintain the following documents:

  • A copy of the health insurance policy and the premium receipt.
  • A copy of the payment receipt in the form of a cheque, demand draft, or online banking.
  • A copy of the policy document reflecting the payment transaction.

Important points to remember

  • You cannot claim tax benefits if premiums are paid in cash.
  • You can claim tax benefits on premiums paid for a valid health insurance policy.
  • You can claim tax benefits on premiums paid for critical illness add-on covers.
  • It is important to note that claiming tax deductions on health insurance premiums does not necessarily mean that all medical costs get covered.

Key exclusions: Health insurance for tax saving

It is important to know the key exclusions of health insurance policies when it comes to tax saving as well. Some of the key exclusions that policyholders should keep in mind are:

  • You do not get health insurance tax benefits for premiums paid towards policies purchased for siblings, uncles, aunts, cousins, or any other relatives.
  • You do not get tax benefit for policies that provide coverage for non-allopathic treatments like Ayurveda or Homeopathy.
  • You will not get medical insurance tax benefit for any claim made for treatments or procedures related to pregnancy, fertility, or childbirth.
  • Premiums paid for personal accident policies or critical illness policies are not eligible for tax benefits under Section 80D.

Health insurance companies on Bajaj Finance Insurance Mall that offer tax benefits

Health insurance partners listed below provide tax benefits on health insurance premiums.

Insurance companies offering tax benefits on their health insurance

Aditya Birla Health Insurance

Niva Bupa Health Insurance

Manipal Cigna Health Insurance

Bajaj Allianz Health Insurance

Frequently asked questions

How can I get tax benefits on health insurance?

You can get tax benefits on premiums paid for health insurance under section 80D of the Income Tax Act. The tax benefit slab differs based on the insurance policy type, premium paid, and the policyholder’s age. You can declare your investments at the office, so you save from applicable tax deductions. You can also submit the relevant documents while filing Income Tax Returns.

What are the income tax deduction limits for parents and senior citizens for health insurance?

Under Section 80D of the Income Tax Act, policyholders can claim a tax deduction of up to Rs. 25,000 for individual or family health insurance. Additionally, policyholders can claim Rs. 25,000 for premiums paid on health insurance for parents. If the parents are senior citizens, then policyholders can claim up to Rs. 50,000. Senior citizens who bought health insurance for themselves and their spouses can claim a tax deduction of up to Rs. 50,000.

What are the important factors to consider when claiming income tax deduction under Section 80D for health insurance?

The factors to consider when claiming income tax deductions under Section 80D are eligibility, payment methods, and supporting documents. Ensure that you meet the eligibility criteria, such as age and premium payment, when claiming deductions. Additionally, you must make the payments through cheque, demand draft, or online banking to be eligible for tax deductions. Finally, you must keep copies of their policy documents and payment receipts for support claims to submit during tax filing.

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Insurance is the subject matter of solicitation. *T&C Apply - Bajaj Finance Limited (‘BFL’) is a registered corporate agent of third-party insurance products of Bajaj Allianz Life Insurance Company Limited, HDFC Life Insurance Company Limited, Future Generali Life Insurance Company Limited, Bajaj Allianz General Insurance Company Limited, SBI General Insurance Company Limited, ACKO General Insurance Limited, ICICI Lombard General Insurance Company Limited, HDFC ERGO General Insurance Company Limited, Tata AIG General Insurance Company Limited, Niva Bupa Health Insurance Company Limited, Aditya Birla Health Insurance Company Limited, Manipal Cigna Health Insurance Company Limited and Care Health Insurance Company Limited under the IRDAI composite CA registration number CA0101. Please note that, BFL does not underwrite the risk or act as an insurer. Your purchase of an insurance product is purely on a voluntary basis after your exercise of an independent due diligence on the suitability, viability of any insurance product. Any decision to purchase insurance product is solely at your own risk and responsibility and BFL shall not be liable for any loss or damage that any person may suffer, whether directly or indirectly. Please refer insurer's website for Policy Wordings. For more details on risk factors, terms and conditions and exclusions please read the product sales brochure carefully before concluding a sale. Tax benefits applicable if any, will be as per the prevailing tax laws. Tax laws are subject to change. Tax laws are subject to change. BFL does NOT provide Tax/Investment advisory services. Please consult your advisors before proceeding to purchase an insurance product. Visitors are hereby informed that their information submitted on the website may also be shared with insurers. BFL is also a distributor of other third-party products from Assistance Services providers such as CPP Assistance Services Pvt. Ltd., Bajaj Finserv Health Ltd. etc. All product information such as premium, benefits, exclusions, sum insured, value added services, etc. are authentic and solely based on the information received from the respective insurance company or the respective Assistance service provider company.

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