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How to Claim Tax Benefits on Medical Insurance Premium?

Read more about the Health insurance plans and policies, its applicability, tax exemptions, and other tax benefits. To know more in detail, Visit now.

  • 3,186 Views | Updated on: Dec 27, 2023

With the rising incidence of medical ailments, contributing risk factors and the ever-increasing healthcare costs; the need for a health insurance plan is indisputable. Today, everyone from the elderly to the youngsters, face several health issues. The treatment for a majority of prevailing health concerns can cause a considerable strain on the financial budget.Therefore, it is crucial to invest in a medical insurance plan early in life.

That’s not all! In addition to extensive financial assistance against medical expenses, health insurance also provides tax relief. The premiums paid for availing health insurance are tax-deductible under Section 80D the Indian Income Tax Act, 1961.

What are the tax savings offered by a health insurance policy?

Every individual and HUF (Hindu Undivided Family) can avail a tax deduction for the annual medical insurance premiums. The deductions under Section 80D, 80DD, 80DDB and 80U are in addition to the Section 80C tax breaks.

Scenario Annual Premium Exemption for Self, Spouse or Children (In Rs.) Annual Premium Exemption for Parents(In Rs.) Annual Tax Deduction(In Rs.) Applicable Section
Individual, family and parents, all less than 60 years 25,000 25,000 50,000 80D
Individual and family (less than 60 years). And even one parent above 60 years 25,000 50,000 75,000 80D
Individual and family, where even one member is over 60 years. And parents are above 60 years 50,000 50,000 1,00,000 80D
HUF members (below 60 years) - - 25,000 80D
HUF members (above 60 years) - - 75,000 for disability. Rs 1,25,000 in case of severe disability 80U (for the individual) 80DD (for dependent)
Individual or dependent family member (any below 60 years of age) with specific diseases* 40,000 40,000 40,000 80DDB
Individual or dependent family member (any above 60 years) with specific diseases* 1,00,000 1,00,000 1,00,000 80DDB

*Specific diseases include neurological issues, cancer, AIDS, chronic kidney failure and haematological disorders. If you have paid your policy premiums in a lump sum, tax benefits will accrue for your health insurance policy term.

How to claim tax exemption on health insurance premiums?

You can claim tax benefits on health insurance at the time of filing your annual income tax returns (ITR) by following these steps:

1. At the time of filing ITR, choose ‘80D’ or the other applicable section under the ‘Deductions’ column.

2. From the drop-down menu, select the condition for which you are claiming the tax exemption. There are seven options in the drop-down, namely:

  • Self and family
  • Self (above 60 years) and family
  • Parents
  • Parents (above 60 years)
  • Self and family with parents
  • Self and family with parents (above 60 years)
  • Self (above 60 years) and family with parents (above 60 years)
  • 3. After this, attach supporting proofs and documents required. Premiums in cash are not tax exempted.

    For example, Yuvraj is 40 years old. He pays health insurance premiums, Rs. 30,000 (for himself) and Rs. 40,000 for his father (65 years). So, at the time of ITR filing, Yuvraj can claim a tax deduction up to Rs. 25,000, for premiums paid for his policy, and up to Rs. 50,000 for premiums paid for his father’s policy. Hence, his total annual tax exemption would be Rs. 65,000 (Rs. 25,000 + Rs. 40,000). This exemption will vary as per the different scenarios mentioned above.

    Medical Insurance and Tax Benefits with Comprehensive Health Insurance from Kotak Life

    Health insurance policies like Kotak Health Shield can provide optimum financial protection and can also act as a great tax-saving investment. The Kotak Health Shield provides cover for major conditions like cancer, cardiac, liver, neuro, as well as, personal accident inclusive of disability and accidental death. You can also avail tax benefits on the premium paid as per the prevailing tax laws.

    Choosing the right insurance policy is like a solid investment for the future. So, choose well.

- A Consumer Education Initiative series by Kotak Life

Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors

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