How to Claim Tax Benefits on Health Insurance Premiums?
Medical insurance not only safeguards you and your family against medical emergencies but also helps reduce your tax liability. Under Section 80D of the Income Tax Act, 1961, individuals can claim tax deductions on premiums paid for medical insurance policies for themselves, their family members and their parents, subject to specified limits.
To avail of these tax benefits, taxpayers must disclose the relevant premium details while filing their Income Tax Return (ITR). In this blog, we will explain the process to claim tax benefits on health insurance premiums, along with key points you should keep in mind to ensure a smooth and compliant claim.
What are the Deductions Available Under Section 80D?
As per current income tax provisions, an individual can claim an aggregate deduction of up to ₹25,000 for the insurance premiums paid for self, spouse and dependents. An additional deduction of up to ₹50,000 is available for premiums paid for parents who are senior citizens (aged 60 or above). However, if both the taxpayer and their parents are senior citizens, the total deduction can be up to ₹1,00,000 per financial year.
You can refer to the table below for a complete understanding
| Policy Coverage | Deduction for Self & Family (₹) | Deduction for Parents (₹) | Maximum Deduction (₹) |
| Self & Family (Below 60 Years) | 25,000 | – | 25,000 |
| Self & Family + Parents (All Below 60 Years) | 25,000 | 25,000 | 50,000 |
| Self & Family (Below 60 Years) + Parents (Above 60 Years) | 25,000 | 50,000 | 75,000 |
| Self & Family + Parents (All Above 60 Years) | 50,000 | 50,000 | 1,00,000 |
| Members of HUF (Below 60 Years) | 25,000 | – | 25,000 |
| Members of HUF (Member Above 60 Years) | 50,000 | – | 50,000 |
What Are the Steps to Claim Tax Benefits on Medical Insurance Premiums?
Here are the steps mentioned below to claim your tax benefits:
Step 1: Go to the Deductions Section
While filling your ITR form, look for the ‘Deductions’ column and select Section 80D, which is meant for claiming medical insurance benefits.
Step 2: Choose the Applicable Category
Once you select 80D, a drop-down menu will appear. You need to choose the option that applies to you:
- 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
Step 3: Upload Supporting Documents
Attach premium payment receipts and policy documents for verification by the Income Tax Department.
Step 4: Check the Mode of Payment
Make sure the premium is paid via net banking, debit/credit card, cheque or demand draft. Cash payments are not eligible for deductions.
Step 5: Claim for the Correct Financial Year
You can claim the deduction only for the financial year in which the premium is paid. Past or future year premiums cannot be claimed.
Conclusion
Claiming tax benefits on medical insurance premiums under Section 80D is a simple yet effective way to reduce your tax liability. By selecting the correct category, using eligible payment modes, and maintaining proper documents, you can ensure a smooth claim process. With proper planning, health insurance can serve as both a protection and a tax-saving tool.
