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Under Section 80D save up to ₹75,000 on income Tax benefits of the Income Tax Act, *Section 80D, 1961 allows for tax deductions on health insurance premiums. The deduction threshold for individuals is Rs. 25,000 for those under 60 years of age, while it increases to Rs. 50,000 for senior citizens, so you can save upto 75,000* per year
If your annual income comes under tax liability, you can buy a health insurance plan and claim tax deductions for the premium you pay. Whether you are buying an individual Health plan or a family health insurance you can take advantage of the tax benefits. It helps you save your hard-earned income apart from protecting yourself against rising health care costs.
You need to claim tax benefits on medical insurance when you file your Income Tax Returns (ITR) for the said financial year. Follow the steps below to get the health insurance tax benefits.
While filing your ITR, under the ‘Deductions’ column, you need to select 80D to claim tax deductions on medical insurance premiums.
Choose the criteria under which you are claiming the deduction. Here are the criteria that you can choose from.
Self and Family
Self (Above 60 years) and Family
Self + Parents
Parents (Above 60 years)
Self, Family, and Parents
Self, Family, and Parents Above 60 years
Self (Above 60 years), Family, and Parents Above 60 years
Attach supporting documents (the receipt of the premium payment) for the Income Tax Department to assess the documents.
Please note: You can claim tax benefits only if you have paid the premium through net banking, debit or credit card, cheque, or demand draft. Cash payments are not eligible for tax benefits.
Eligibility details to claim tax deductions on the health insurance plan under Section 80D of the IT Act, 1961.
Individuals who have bought medical insurance for themselves, spouse, dependent children, or parents
Member of a Hindu Undivided Family (HUF)
Tax Deductions Under Section 80D
Self and Family (All below 60 years)
Self and Family + Parents (All below 60 years)
Rs. 25,000 + Rs. 25,000 = Rs. 50,000
Self and Family (Below 60 years) + Senior Citizen Parents
Rs. 25,000 + Rs. 50,000 = Rs. 75,000
Self and Family (Eldest is above 60 years) + Senior Citizen Parents
Rs. 50,000 + Rs. 50,000 = Rs. 1,00,000
Example: Mukesh is aged 45 years, and his mother is aged 75 years. Mukesh has taken a medical insurance plan for himself and his mother and pays a premium of Rs. 30,000 and Rs. 35,000, respectively.
Mukesh can claim tax benefits of up to Rs. 25,000 for his policy, and up to Rs. 50,000 for his mother’s policy since she is a senior citizen. Given the cap on tax deductions, Mukesh can claim tax deductions of up to Rs. 60,000 (Rs. 25,000 + Rs. 35,000).
In a multi-year medical insurance plan, the amount of premium remains the same throughout the policy period. Hence, you can protect yourself from a potential increase in premiums during renewals. As for the tax exemption for the multi-year plan, you can claim it every year.
For example: if you have paid Rs. 45,000 for a three-year long-term health insurance plan, you can claim tax exemptions of Rs. 15,000 for each year.
Here are the benefits of tax deductions on medical insurance.
Increases take-home salary (salaried individuals)
Claim tax benefit of up to Rs. 1 lakh
Here is the health insurance tax benefit under Section 80D for senior citizens (above 60 years and below 80 years) on health insurance premiums.
Claim tax exemption of up to Rs. 50,000 for every financial year.
Claim tax exemption of up to Rs. 5,000 on preventive health check-ups for every financial year.
1. Exclusive section
Tax benefits act, as an incentive to purchase a comprehensive health insurance policy. Section 80D is a part of Indian Income Tax Act that offers tax benefits for a specific type of health insurance. Unlike section 80C which pertains to Life Insurance and other investments, section 80D is an exclusive section for health insurance.
2. Policy-based deduction
The amount of Income Tax deduction, you are eligible to receive depends upon the choice of policy purchased. There are different deduction slabs for different types of policies. These slabs might change as per the annual budget declared by the Government of India.
3. Digital payments
In order to avail income tax benefits, you need to pay insurance premium via digital modes. Internet banking, debit card, etc. are popular digital modes of making the payment. You will not be eligible for tax benefits if you pay the insurance premium in cash. Note that cash payment for preventive health check-ups is an exception and tax benefits shall be provided for the same.
5. Applicable on most policies
You can avail tax deductions on indemnity as well as defined benefits policies. Individual, Family Floater and Critical Illness plans offer tax benefits. However, group health insurance is not eligible for tax benefit. But if you enhance the group health insurance policy by paying extra premium then you are eligible for tax deduction.
6. Service Charge
The deduction is not applicable for the service tax levied on payment of the insurance premium. Service tax charges are an exclusion when it comes to availing health insurance tax benefit under section 80D of the Income Tax Act.
Medical insurance is necessary and beneficial as you can avail yourself of tax benefits for the premiums you pay. It is essential to understand your needs and then decide if you want to include dependent parents to avail of the maximum tax benefit. Ensure you claim tax exemption while filing the Income Tax Return to not miss out on the benefit.
Under Section 80D of the IT Act, you can claim a tax exemption of up to Rs. 5,000 for the payment towards preventive health check-ups in a financial year. The tax deduction should be within the specified limit of Rs. 25,000 or Rs. 50,000 based on the eligibility. For example, if you are not a senior citizen and paying Rs. 20,000 as premium towards the health insurance plan, you can claim tax exemption on preventive health check-ups of up to Rs. 5,000.
The premium payment receipt and the health insurance policy copy are required while filing Income Tax Returns. If you have paid a premium towards your parent’s coverage, you need to procure the 80D certificate from the insurer, in this case, ACKO.
You do not have to submit any document for claiming the tax deduction while filing the ITR. However, you should retain the receipt of the payment for future reference.
Whether you have one or more health insurance policies, the maximum you claim as tax benefit is Rs. 25,000, and if you or your spouse are senior citizens, you can claim up to Rs. 50,000.
Individuals, including Non-resident Indians (NRIs) and Hindu Undivided Family or HUF, can claim tax exemption under Section 80D of the IT Act.