Deduction towards Health Insurance & Health Expenses in the Income Tax Act


Deduction towards Health Insurance & Health Expenses in the Income Tax Act


The premiums paid for self, spouse and children are eligible for deduction up to Rs 25,000 if all of them are below the age of 60, including the preventive health checkup. However, Those above 60 years of age can claim tax deduction of up to Rs 50,000.

One can also claim Rs 50000/- as deduction for the Medi claim of your parents senior citizen. Even medical bills to the extent of Rs 50000/- will be allowed to be deducted u/s 80D.

Total deduction a person having senior citizens as parents will get Rs 75000/- u/s 80D.

Moreover, one can avail tax deduction for health insurance premiums paid for parents. Tax deduction can be availed for both types of policies — defined benefit where a fixed amount is paid as claim and indemnity plan where the claim is paid based on the medical expenses subject to the overall sum insured.

Tax deduction on health insurance comes with certain conditions. If they are not followed, then the insured will not be able to claim any tax exemption and the exemptions can be reversed.

One must note the following provision in the Income Tax law with regard to health insurance and health expenses.

1. Health insurance premium must be paid by any mode such as cheque, or money transferred through NEFT or UPI other than cash.

2. However, cash payment on account of preventive health check-up is admissible for tax benefit up to Rs 5000/- for all family members.

3. If the premium is paid by another person on behalf of the individual claiming the tax deduction, then the latter will not be able to claim any tax exemption.

4. The premium has to be paid from the taxable income of the person who wants to claim the tax benefit. Even in a floater plan, the tax benefit cannot be shared.

5. Those buying a multi-year policy can claim tax deduction proportionately over the policy term.

6. The individual will have to take a certificate from the insurer mentioning the amount that can be claimed.

7. Anyone cannot claim any tax benefit on the health insurance premium paid for in-laws and siblings, even if they are dependent on them for finances.

8 You cannot avail tax deduction on outpatient department treatment (OPD) health subscription plans as they are not health insurance plans under Section 80D.

9.. However, cashless OPD treatment cover and riders of such critical illness will entail tax benefits within the overall limit as per the insured’s age bracket.