Frequently Asked Questions Related to the Income Tax Health Insurance Deduction

Investing in health insurance is a wise decision as it serves as a safety net during medical emergencies. Still, medical insurance penetration in India is low. The government recognises this and strives to improve the awareness and adoption of insurance. One of the tools used by the government to achieve this is section 80D of the Income Tax Act 1956. It offers a tax deduction for medical insurance premiums, encouraging taxpayers to buy health insurance.

 

This article will resolve the most common queries regarding medical insurance tax deductions so that you can fully enjoy the benefits of this tax law.

 

Frequently asked Questions Related to Tax Deduction for Medical Insurance

In order to reduce the out-of-pocket medical expenses of citizens, the Indian government has made the provision of medical insurance tax deductible under Section 80D. Available in addition to Section 80C, it also covers top-up and critical illness plans for all-around protection.

 

As tax laws are difficult to comprehend, the following doubts may creep up into the taxpayers’ minds. Read on for their resolution.

 

Who is Eligible for Medical Insurance Tax Deductible?

Tax benefit under Section 80D is available for individuals (resident as well as non-resident) and Hindu Undivided Families (HUF). Other entities like corporates and partnership firms can’t avail this benefit.

 

Can Insurance be Obtained for Relatives?

As an individual, you can buy a health policy for yourself, your spouse, your dependent children, as well as your parents. A HUF can claim a deduction for its members.

 

Which Payments are Eligible for Tax Deduction?

In addition to health insurance premiums paid for own self, spouse, dependent children, and parents, the following payments are eligible for deduction:

 

• Expenses related to preventive health check-ups (only in the case of individuals).
• Medical expenses incurred on account of senior citizens, provided they are not covered under any medical insurance.
• The amount contributed to Central Government Health Scheme or other schemes notified by the government for this purpose.

 

What is a Preventive Health Check-up?

This term was introduced in 2013-14 in the tax laws and has not been defined. It can thus be understood as it is used in general parlance. Preventive health check-ups are conducted to diagnose a disease. Early diagnosis can help detect a disease before it worsens. With this provision, the government thus seeks to encourage regular check-ups and prompt diagnosis.

 

Can Premium be Paid in Cash?

To be able to claim an 80D deduction, you must pay the premiums in a mode other than cash, such as through debit cards, credit cards, net banking, cheques, etc. Preventive health checkups can, however, be availed by paying cash.

 

What is the Amount of Tax Benefits Available?

The maximum amount of tax deduction depends on the taxpayer’s age. The following table illustrates the deduction limits under different cases:

 

Cases	Deduction Available (₹)
	For self, spouse, and children	For parents	Preventive health check-up	Total
Self below 60 years, Parents below 60 years	25,000	25,000	5,000	50,000
Self below 60 years, Parents above 60 years	25,000	50,000	5,000	75,000
Self above 60 years, Parents above 60 years	50,000	50,000	5,000	1,00,000
HUF members below 60 years	25,000	25,000	-	25,000
HUF members above 60 years	50,000	50,000	-	50,000

 

Can Deduction be Claimed for Multiple Policies?

Section 80D deduction can be claimed for more than one policy, subject to the maximum deduction limit as specified in the above table.

 

How can the Tax Deduction for Medical Insurance be Claimed?

The tax deduction can be claimed while filing the Income Tax Return (ITR). The following steps must be followed:

• Choose ‘80D’ under the ‘Deductions under Chapter VI-A’ column.
• Seven options will be presented in the drop-down menu corresponding to different age groups, such as ‘Self and family’, ‘Self (above 60 years) and family’, ‘Parents (above 60 years)’, etc. You can choose the option under which you are claiming the deduction.
• Submit the relevant documents.

 

It is important to note that the benefit is not available for payments made in the previous year.

 

Which Documents are Required to Claim 80D Deduction?

The income tax authorities have not mandated any specific document to be submitted while filing the ITR. However, proof of the premium payment must be attached to the ITR form as a piece of evidence.

 

Having understood the tax benefit of medical policies, the next step is to buy the policy best suited to your needs. Niva Bupa offers a diverse set of health plans for individuals, families, and senior citizens, as well as travel plans. With our plans, you can get comprehensive coverage at competitive rates. Moreover, you can be assured of high-quality treatments and convenient claim settlement with our 8600+ network hospitals. Check out our website to compare the available plans based on your chosen parameters.