Health Insurance Tax Benefits Under Section 80D

A health insurance plan is essential for saving yourself and your family from the burden of costly medical treatments during medical emergencies.

But do you know that the best health insurance plans can also provide impressive great tax benefits? Want to know how? Read on.

What is Section 80D of the Income Tax Act?

Section 80D of the Income Tax Act 1961 states that health insurance policy buyers can claim tax deductions of up to Rs 25,000 on the premiums paid per financial year.

If the premiums are paid for senior citizens, i.e., above 60 years of age, then the deduction increases to Rs 50,000 per financial year. The deduction is allowed on health insurance bought for individuals, spouses, children and parents.

Health Insurance Tax Benefits 80D

Tax Deductions for Parents' Health Insurance Premium

Under section 80D medical insurance benefits, you can get tax benefits for payments made for the premium of parents' health insurance. You can claim tax deductions up to Rs 50,000 per financial year if your parents are above 60 years of age.

Tax Deductions for Senior Citizen Medical Expenses

As per Section 80D of Income tax, you can avail of tax deductions of up to Rs 50,000 per financial year for the health-related expenses of senior citizens who are not included in any health insurance plans for family or senior citizens. However, if senior citizens have health insurance, then this deduction can not be made.

Tax Deductions for Hindu Undivided Family

There are tax deduction benefits available on health insurance premiums for any member of the Hindu Undivided Family (HUF). Health insurance tax benefit 80D states that any member of HUFs can avail of tax deductions of up to Rs 25,000 per financial year. If they are above the age of 60 years, then the deduction for them is up to Rs 50,000 per financial year.

Preventive Health-Checkup Tax Deduction

The government introduced tax deductions on preventive checkups to encourage individuals to be proactive about their health. Thus, now you can get deduction benefits of Rs 5,000 per financial year for preventive health checkups.

Just remember that this tax deduction on preventive health check-ups is included in the overall health insurance tax benefit 80D limit of Rs 25,000 for people under 60 and Rs 50,000 for senior citizens.

Tax Deductions on Multi-Year Health Insurance Premiums

If you are buying multi-year health insurance and have paid the premium in a lump sum during the purchase, then you can avail of significant tax deductions.

However, similar to annual insurance, a multi-year medical insurance policy under the 80D deduction is also subject to the overall limit of Rs 25,000 for individuals below 60 years and Rs 50,000 for senior citizens.

Wrapping It Up

Buying insurance is a necessary financial investment that helps in keeping your physical and financial health in check. It assists you in getting the best treatment during medical emergencies and saves you from any financial strain.

As we have discussed, your insurance can do more than just protect you during a medical crisis. It can also help you maximise your tax savings under Section 80D.