Do Not Miss on Tax Benefits of Health Insurance
2 min read
・Jul 15, 2024
Even though WHO has announced that 2023 is the end of the COVID-19 pandemic, many diseases still affect the Indian population. According to WHO, ischaemic heart disease is the leading cause of death in India. The prevalence of a sedentary lifestyle and lack of space for physical activities have resulted in a 44% increase in the number of diabetic and pre-diabetic patients.
The government has introduced tax deductions for health insurance policies to encourage people to seek timely treatments and protect their health. People tend to focus more on health and well-being if they are confident that an insurer will step in to cover the medical costs. In this blog, let’s explore the tax benefits of health insurance under Section 80D.
Tax Benefits for Self, Spouse, and Dependent Children
When you buy health insurance, your tax deductions further reduce your taxable income, reducing your financial burden. You can also avail of these tax benefits for top-up health and critical illness plans.
Whether you have individual health insurance or family floater insurance, you can get tax deductions against the medical insurance premiums paid for yourself and your family, including children. Under Section 80D of the old tax regime, you can get a maximum deduction of Rs. 25,000 for health insurance premiums for yourself, your spouse, or your children.
Tax Benefits for Parents
Instead of purchasing separate insurance policies for your parents, you can include them under a single-family floater plan. In that case, the allowable deduction is Rs. 25,000 for your parents if they are less than 60 years of age. Otherwise, if your parents are senior citizens, you can avail of Rs. 50,000 deductions for them. These deductions are applicable on top of deductions you can claim for yourself, your spouse, and your children.
Tax Benefits for Preventive Health Checkups
Healthcare costs also include costs for preventive health checkups. You can claim maximum deductions of Rs. 5000 for your spouse, dependent children, or parents. Even though this deduction is available, it cannot be claimed if you have already claimed maximum allowable deductions with insurance premiums.
Tax Benefits for Medical Expenses of Senior Citizens
Senior citizens with health insurance can claim a total of Rs. 1,00,000 if they, their family, and the parents included in the policy are more than 60 years of age. If senior citizens are not covered by any health insurance, they can claim a maximum deduction of Rs. 50000 for the medical expenses incurred. These expenses could include consultations, medicines, impairment aids, etc.
The tax benefits are summarised in the table below:
Policy included for | Deduction for self & family | Deduction for parents | Deduction for preventive health checkups | Maximum allowable deduction |
| Self & family – all below 60 years | 25,000 | – | 5,000 | 25,000 |
| Self & family & parents – all below 60 years | 25,000 | 25,000 | 5,000 | 50,000 |
| Self & family (below 60 years) & parents (above 60 years) | 25,000 | 50,000 | 5,000 | 75,000 |
| Self & family & parents (above 60 years) | 50,000 | 50,000 | 5,000 | 1,00,000 |
Members of HUF (all below 60 years) | 25,000 | 25,000 | 5,000 | 25,000 |
| Members of HUF( at least one member is above 60 years) | 50,000 | 50,000 | 5,000 | 50,000 |
| NRIs (regardless of age) | 25,000 | 25,000 | – | 25,000 |
Key Takeaways
Understanding tax benefits is also crucial to choosing the right insurance plan. Sometimes, buying a family floater plan with tax benefits may be cheaper than buying a separate health insurance plan for each family member.
Purchasing a separate senior citizen plan may allow additional tax discounts if your parents have separate incomes. However, while determining health insurance premiums, your main focus must be obtaining maximum affordable coverage. The tax benefits you get are an added bonus.
Consider choosing platforms like PhonePe for a seamless and hassle-free insurance purchase experience.
Frequently Asked Questions
Do we need to submit any additional documents for availing tax benefits under section 80D ?
Can I claim tax benefits under both sections 80D as well as 80DD simultaneously ?
Are these tax benefits applicable just on medical bills or the premiums paid as well ?
What are preventive health checkups associated with tax benefits ?
Does PhonePe offer any additional discounts on health insurance plans apart from the tax benefits ?
