Medical Insurance Tax Benefits

Medical Insurance Tax Benefits

Medical insurance premium has to be paid for health insurance of the family members, self and even for parents, whether dependent or not.The insurance premium paid can be used for tax benefits and the payments must be made by the person himself directly and not by any third party.

1)In current situation where everyone faces health problems at early age,medical insurance has become must for everyone. It helps us at times when hospitalization is needed, as it helps in keeping our savings intact.

2) Having sufficient coverage helps us to safeguard us in case of critical illness, future of our dependants.

3)Medical coverage insurance gives and also tax benefits to the person. These are called as mediclaims plans. The premium paid is allowed as deduction u/s 80 D of the Income tax act.

4)One can claim tax deductions, provided you are paying the premium on a mediclaim policy which is in the name of

  • Oneself 
  • One’s Spouse 
  • Parents ( Parents need not be dependent) 
  • Dependent Children

5)Deduction u/s 80D on health insurance premium is Rs 25,000. For Senior Citizens it is Rs 30,000. For very senior citizen above the age of 80 years who are not eligible to take health insurance, deduction is allowed for Rs 30,000 toward medical expenditure.

6)

Individuals Covered

Exemption limit

Health check up exemption

Total deduction

Self & Family

Rs 25000

Rs 5000

25000

Self & Family Parents

(Rs 25000+25000=5000)

Rs 5000

55000

Self & Family( Sr citizen parents)

(Rs25000+30000= 55000)

Rs 5000

60000

Self( Sr citizen) + Parents (Sr citizens)

(Rs 30000+30000=60000)

Rs 5000

65000


7)The medical insurance premiums paid towards parents or guardians are additionally liable for deductions upto INR 25,000 p.a. under Section 80D. But, if any one or both of your parents are senior citizens the maximum limit of 80D exemptions rises upto INR 30,000 p.a. 8)Moreover, the deduction limit can be further increased  by INR 5,000 for parent’s annual health checkup.

9)Apart from the above-mentioned deduction upto INR 25,000 (or 30,000), one can claim 80D tax exemption on preventive health checkups incurred.

10) Under Section 80D of the Income Tax, an additional deduction of INR 5,000 is permitted on health checkups in a Financial Year. So, with this deduction, one can save tax on the health checkups as well.

11)Very senior citizens (80 years of age or above) who do not have any insurance policy can claim tax exemptions upto INR 30,000 p.a. on the preventive health checkups and treatments.

For very senior citizens, others tax benefit is also available under Section 80D.