Are Health Insurance Premiums Tax-Deductible?

Health insurance is vital part of the insurance portfolio for every individual. With growing rate of expenses of health care services and even more expensive treatments of severe illnesses, buying a good health care plan has become crucial. With the sudden strike of pandemic COVID-19, the importance of being financially prepared to face such unforeseen medical emergencies has been highlighted more than before. A health insurance plan is basically an insurance cover that acts as a financial cushion to cover the medical expenses when you are in need. And to get this cover you have to pay certain amount of premiums at regular intervals. Now the government understanding the need and importance of buying a health insurance plan can neither make it mandatory to buy one nor can provide it for free. But in order to promote it, government of India provides certain tax benefits on the premiums you pay towards the health insurance policy. To know these tax benefits in detail read further.

Deduction of tax on premiums paid on health insurance policy under Section 80D in Income Tax Act:

As per this section, you are enabled to claim a deduction of up to ₹25,000 every financial year for the premiums paid towards health insurance plan. The premiums you pay must be for health insurance policy for yourself or your spouse or dependent children. In case, you or your spouse are above 60 years of age that is in senior citizens category, then the limit exceeds up to ₹50,000. Under Section 80D, the preventive health care checkups can also be claimed for up to ₹5,000 per financial year.

Deduction on health insurance premiums paid for parents:

Many of you must have parents who are senior citizens and thus you buy and pay premiums of health insurance policy to meet their medical expense needs. In such case the maximum limit of tax deduction on the paid premiums is up to ₹30,000 per budgetary year. The deduction for medical premiums paid for guardians is additionally qualified up to ₹25,000 every budgetary year. Again, the limit is subsumed additionally with ₹5,000 on health checkups.

Deduction on health insurance premiums paid for super senior citizen:

For people above 80 years of age also referred to as super senior citizens having no insurance policyare allowed to claim a deduction of up to ₹30,000 for every budgetary year for the health checkups and treatments. Though this is not for own expenses. Also, in case you have one parent say for example your dad above the age of 80 and mother under between 60-80 years of age then you are allowed to claim tax deduction of up to ₹30,000 on the medical expenses , medical coverage and registration you pay for them.

Deduction on health insurance premiums paid for super senior citizen:

In case of serious illness being detected, you can claim for the tax deduction on the paid premiums for its treatment of up to ₹1,40,000 that is ₹60,000 for senior citizens and ₹80,000 for super senior citizen. The list of these severe ailments is mentioned in Rule 11DD, which includes various cancers, Parkinson, chronic rental failure, etc. This tax deduction can be claimed for yourself, parents, spouse or dependent kids or siblings.

Deduction of tax under Section 80DD on health insurance premiums paid for dependent with disability:

You can claim tax deduction under Section 80DD of up to ₹75,000 for the expenses incurred for treatment, training, nursing, etc. of your dependent with disability. In case of severe disability, the deduction limit on health insurance extends to ₹1.25 lakh.