What are the tax benefits I get if I opt for Health Insurance?

Mar 05, 2018 | 11 months ago | Read Time: 2 minutes | By iKnowledge Team

You get tax benefits on preventative health check-ups, add-ons and premiums on parents’ policies, among others.

A health insurance policy doesn’t come in handy during medical emergencies only. It helps you save tax as well. So, let’s see the different ways in which you can save taxes by opting for a health insurance policy:

Preventative health check-ups

You can avail tax benefits of up to Rs 5,000 for preventative health check-ups under Section 80D of the Income Tax. You can get a further tax deduction of Rs 7,000 if you are paying for preventive health check-ups of your parents aged 60 or above.

In total, you can get an annual tax benefit of up to 25,000 if you are paying Mediclaim premium of Rs 20,000 and opted for a preventative health checkup of Rs 5,000.

The tax benefits are available for both indemnity and fixed benefit health policies.

Don’t pay your premiums in cash

As mentioned earlier, you can get a Rs 20,000 tax deduction for paying your premium. However, you need to note that the premium should NOT be paid in cash.

The ideal ways of paying your insurance premium are:

  • Internet banking
  • Cheque
  • Bank draft
  • Credit card

Add-ons on life insurance

The tax benefits are not limited to health insurance policies only.

You can get tax breaks if you have a life insurance policy as well, provided you have add-ons like medical insurance and critical illness riders.

So, if you are paying premium towards such add-ons, you are legible to get tax deductions under Section 80D.         

Health insurance premium paid for your parents

You can get a higher tax deduction if you are paying premium for your parents’ health insurance policy. The amount of tax deductions is dependent on the age of your parents.

  • If you are parents are below the age of 60, the maximum deduction is Rs 25,000.
  • If they are 60 and above, the deduction limit is Rs 30,000.

What happens if you are above 60 and are paying health insurance premiums for your parents? You get tax benefits of Rs 60,000.

Premium paid for your children

You get tax benefits for paying insurance premium for your children.

There are three ways in which you get tax benefits:

  • You get tax benefits if your child is below the age of 18 and not working.
  • In case of a male child, you can get tax benefits if he is unemployed till the age of 25.
  • In case of a female child, you can get tax benefits if she’s unmarried.

To conclude, there are various tax benefits on insurance. However, you should purchase a health insurance policy to protect your finances during a medical emergency, not merely to save tax.


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