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Health insurance plans offer multiple benefits right from safeguarding you against sudden healthcare expenses to the planned surgeries. The health insurance policy is an ideal insurance plan which offers multiple benefits along with the most important benefit of offering tax rebates under section 80 D of the Income Tax Act, 1961.
The premiums paid towards health insurance policy allow you to claim tax deductions under section 80 D. You can get a tax rebate for the health insurance premiums paid towards the health insurance policy:
1. Tax deduction limits
A taxpayer gets a tax deduction under section 80 D for paying health insurance premium (excluding service tax and cess) for self, spouse, and dependant kids up to Rs 25,000 as per the prevailing tax laws. If the taxpayer or spouse or both are senior citizens, the maximum tax deduction which can be claimed for the health insurance premium rises to Rs 30,000.
2. Tax deduction limits for self and family
Additionally, if you are paying the health insurance premium for your parents, who are less than 60 years of age (either dependant or not), you may claim an additional tax deduction up to Rs 25,000. If any of the parents or both the parents are senior citizens, then the maximum amount of tax deduction which can be claimed under section 80 D is Rs 30,000. For uninsured super senior citizens (more than 80 years old) medical expenditure incurred up to Rs 30,000 shall be allowed as a deduction under section 80D.In any of the scenarios the total deduction, which can be additionally claimed apart for paying a premium for self and family is Rs 30,000.
| Tax Exemption Limits | |
|---|---|
| Medical Insurance for self & family – | Rs 25,000 |
| Medical Insurance for self (Senior Citizen) & family– | Rs 30,000 |
| Medical Insurance for (self & Family) + Parents – | Rs 30,000 |
| Medical insurance for Parents (Either or both parents are Senior Citizens) (Who are not senior citizens) | Rs 30,000 |
| Medical insurance for Parents (Who are not senior citizens) | Rs 25,000 |
| Medical Insurance for (self & Family) + Parents – | Rs 30,000 |
| Tax Exemption Limits On Health Insurance Premium | |||
|---|---|---|---|
| Scenarios | Self & Family | Parents | Total |
| Self & Family plus Parents (none of them are senior citizens) | Rs 25,000 | Rs 25,000 | Rs 50,000 |
| Self & Family (nonsenior citizens) plus Parents (where either or both of them are senior citizens) | Rs 25,000 | Rs 30,000 | Rs 55,000 |
| Self, spouse plus Parents (all are senior citizens) | Rs 30,000 | Rs 30,000 | Rs 60,000 |
3. Health Check ups
You can claim tax deductions for preventive health checkups up to the cost of Rs 5,000 within the maximum tax deduction limit of Rs 25,000 or Rs 30,000,as the case may be as discussed above. This implies that if you pay a premium of Rs 20,000 towards your health insurance plan and get a medical health check-up of Rs Rs 5,000, you may claim this amount as a part of the total tax deduction under section 80 D. But if you are paying Rs 22,000 as health insurance premium and have undergone a medical health check-up for Rs 5,000, then in that case only Rs 3,000 can be claimed under section 80 D for a tax deduction.
4. Health-Related Rider Premium
Rider premium or premium for add-on benefits taken along with the base life insurance policy related to health like Critical Illness Rider, hospitalization rider, etc. is also eligible for tax deduction under section 80 D of the income tax act, 1961 under the overall limit specified above.
Let us understand the tax deductions for health insurance premiums with an example:
Example -1
Mr. Arnab (age 38 years) pays a health insurance premium for himself and his family for Rs 26,000. Additionally, he pays a health insurance premium of Rs 38,000 for his parents (who are senior citizens). How much total tax deduction can Arnab claim under section 80 D related to health insurance premiums paid by him?
Arnab can claim a maximum of up to Rs 25,000 as a tax deduction for paying the health insurance premium for themself and their family. Additionally, Arnab can claim tax deduction up to Rs 30,000 as per tax deduction limits for paying the health insurance premiums for parents who are senior citizens. The total tax deduction under section 80 D which can be claimed by Arnab for paying health insurance premium is Rs 55,000 (Rs 25,000 + Rs 30,000).
Example -2
Mr. Arnab (age 60 years) pays a health insurance premium for himself and his family for Rs 36,000. Additionally, he pays a health insurance premium of Rs 40,000 for his parents (who are senior citizens). How much total tax deduction can Arnab claim under section 80 D related to health insurance premiums paid by him?
Arnab can claim a maximum of up to Rs 30,000 as a tax deduction for paying the health insurance premium for themself and their family as he falls in the senior citizen category. Additionally, Arnab can claim tax deduction up to Rs 30,000 as per tax deduction limits for paying the health insurance premiums for parents who are senior citizens. The total tax deduction under section 80 D which can be claimed by Arnab for paying health insurance premium is Rs 60,000 (Rs 30,000 + Rs 30,000).
| Insurance Companies | Health Plans | Tax Deduction under section 80 D | Sum Insured (Min/Max) | Pre- Existing Diseases | Co- Payment | Pre/Post Hospitalization | No Claim Bonus |
|---|---|---|---|---|---|---|---|
| Care Health Insurance Co. | Care Plan | Eligible | 3 Lakh/75 Lakh | Covered after 4 years | Applicable | 30/60 days | Max up to 150% of SI |
| Star Health Insurance Co. | Family Health Optima Insurance Plan | Eligible | 2 Lakh/15 Lakh | Covered after 4 years | Applicable | 60/90 days | Max up to 35% of SI |
| Bajaj Allianz General Insurance Co. | Bajaj Allianz Health Guard | Eligible | 1.5 Lakh/10 Lakh | Covered after 4 years | Applicable | 60/90 days | Max up to 50% of SI |
| Universal Sompo General Insurance Co. | Complete Health Care Insurance | Eligible | 1 Lakh/ 10 Lakh | Covered after 3 years | Applicable | 30/60 days | Max up to 50% of SI |
| Manipal Cigna Health Insurance Co. | Manipal Cigna Pro Health Plus Plan | Eligible | 2.5 Lakh/10 Lakh | Covered after 4 years | Applicable | 60/90 days | Max up to 100% of SI |
| Future Generali General Insurance Co. | Future Health Suraksha Plan | Eligible | 50,000/10 Lakh | Covered after 4 years | Applicable | 60/90 days | Max up to 50% of SI |
| HDFC Ergo General Insurance Co. | Health Suraksha | Eligible | 3 Lakh/10 Lakh | Covered after 4 years | Not applicable | 60/90 days | Max up to 50% of SI |
| ICICI Lombard General Insurance Co. | Complete Health Insurance | Eligible | 3 Lakh/50 Lakh | Covered after 4 years | Applicable | 30/60 days | Max up to 50% of SI |
| HDFC Ergo Health Insurance Co. | Optima Restore Individual | Eligible | 3 Lakh/50 Lakh | Covered after 3 years | Not applicable | 60/180 days | Max up to 100% of SI |
| Niva Bupa Health Insurance Co. | Health Companion Health Insurance | Eligible | 2 Lakh/50 Lakh | Covered after 4 years | Applicable | 30/60 days | Max up to 100% of SI |
| Star Health Insurance Co. | Star Comprehensive Insurance Policy | Eligible | 5 Lakh/25 Lakh | Covered after 4 years | Applicable | 30/60 days | Max up to 100% of SI |
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