Health Insurance Tax Exemptions Explained
Understanding Tax Section for Medical Insurance
The Indian Government introduced exclusive tax-saving provisions under Section 80D of the Income Tax Act to encourage more people to buy a health insurance plan. Thereafter, people started viewing medical insurance policies as not only an indispensable tool for controlling healthcare expenses but also a smart way to obtain several tax advantages.
Section Defining Tax Savings Through Medical Insurance
A regular taxpayer can claim tax exemption of up to Rs. 25,000 on taxable income each financial year upon purchasing a health insurance plan. This rule is as per Section 80D of the IT Act of 1961.
Individuals can claim this benefit after purchasing medical insurance for themselves or jointly with their spouse, parents, or dependent children. The central government’s primary goal is to promote the necessity of medical insurance policies among its citizens through this noble initiative.
Note: For senior citizens, tax deductions of up to Rs. 50,000 can be claimed in a single FY.
Tax Deduction Rule as Per Section 80D
Here is a tabular representation of how tax deductions have been structured for contributions towards medical insurance plans during the period 2023-24:
| Categories of Medical Insurance Applicants | Eligibility | Maximum Deduction Allowed Under Section 80D |
|---|---|---|
| Individuals and families | Single applicant, Jointly with spouse, and with dependent children | Rs. 25,000 |
| Parents (under 60 years of age) | Additional Rs. 25,000 | |
| Senior Citizen Parents (60 years and above) | Additional Rs. 50,000 | |
| Hindu Undivided Families (HUFs) | All members including the family head, spouse, dependent parents and children | Varies as per the eligibility of the family head |
What are the Specific Deductions Eligible Under Section 80D?
As an individual medical insurance holder or a HUF policyholder, you are entitled to receive tax benefits under Section 80D for the below-mentioned payments:
- A medical insurance premium is transferred in any payment mode other than cash to secure financial protection for self, spouse, parents or dependent children.
- Amount spent on booking preventive healthcare appointments up to a maximum limit of Rs. 5,000 in a year
- Medical costs arising from the treatments of a resident senior citizen individual (aged above 60 years) who does not own other health insurance policies
- Payments toward the Central Government health scheme managed by you, your spouse and dependent children as instructed by the Government, avoiding cash mode of payment
Process to Claim Tax Deduction for Medical Insurance
To opt for tax deductions under Section 80D, you must maintain the essential payment invoices and documents for medical insurance premiums and bills incurred from preventive health check-ups.
While trying to save tax liabilities, you must upload scanned copies of the invoices and other supporting documents with your income tax return filing. If you find the procedure complicated, it is advisable to consult a tax professional to complete the procedure on your behalf.
Tell me, medical insurance comes under which section?
Let's know health insurance comes under which section. Each person or HUF can make a claim deduction for health insurance premiums paid in the financial year below Section 80D. This tax deduction is available for top-up health policies and critical illness policies. You may be interested in knowing about Health insurance under which section. Section 80D provides tax deductions on medical insurance premiums till a maximum limit of ₹ 25,000 in a financial year. You could claim deductions for a plan bought for yourself, your spouse and your dependent children.
We have discussed Medical insurance comes under which section. As per Section 80D of the Income Tax Act 1961, health insurance policy buyers can claim tax deductions on the premiums paid per financial year. Below, section 80D medical insurance benefits, you can also avail yourself of tax benefits for payments made for the premium of parents' health insurance. When getting tax deductions below Section 80D of the Indian Income Tax Act for premiums that have been paid on health insurance plans, it's crucial to consider many things in mind.
Also Read:
→ How does Health Insurance Work in India
→ How Can I Retire Early and Get Health Insurance
→ How Cashless Health Insurance Works
→ How Do I Get Health Insurance Without a Job
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This FAQ page contains information for general purpose only and has no medical or legal advice. For any personalized advice, do refer company's policy documents or consult a licensed health insurance agent. T & C apply. For further detailed information or inquiries, feel free to reach out via email at marketing.d2c@starhealth.in