Health insurance in India comes with tax benefits, available under Section 80D of the Income-tax Act, 1961. These benefits vary based on the type of health insurance policy and age.
Says Parimal Heda, chief investment officer at Go Digit General Insurance: "An individual or HUF (Hindu Undivided Family) can claim a deduction from their total income for health insurance premiums paid in any given year under Section 80D of the Income Tax Act. This deduction is also available for top-up health and critical illness plans."
Here are some tax benefits associated with health insurance in India:
Tax Deductions For The Premium Paid: You may avail of tax deductions on the premium payment made towards health insurance policy for yourself, your spouse, dependent children, and parents. The highest allowable deduction amount under this section is Rs 25,000. However, if you or your parents are senior citizens aged 60 years or above, the maximum deduction amount is increased to Rs 50,000.
Tax Deductions For Preventive Health Check-Ups: You can request tax deductions on the costs of preventive health check-ups up to Rs 5,000 per annum. This amount is separate from the deduction allowed on health insurance premiums.
Tax Deductions For Payments Made Towards Medical Treatments: You may be eligible for tax deductions on payments made for medical treatments, up to a maximum limit of Rs 1 lakh. This deduction applies to medical expenses incurred for yourself, your spouse, dependent children, and your parents.
"The deduction benefit is available not only for a health insurance plan for self but also for buying the policy to cover your spouse, dependent children, or parents. An individual can claim a deduction of up to Rs 25,000 for the insurance of self, spouse, and dependent children. An additional or separate deduction for parents' insurance is available for up to Rs 25,000 if they are less than 60 years of age and up to Rs 50,000 if they are above 60 years. If both the taxpayer and parents are aged more than 60 years, for whom the medical covers have been taken, the maximum deduction that can be availed under this section is Rs 1 lakh," explains Heda.
However, the tax advantages linked to health insurance are subject to modifications in accordance with amendments to the Income Tax Act of 1961. It is advisable to seek guidance from a tax specialist or financial advisor for comprehensive information on tax benefits associated with health insurance.
