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Can Travel Insurance Be Claimed on Income Tax?

Team AckoAug 23, 2025

Are travel insurance premiums eligible for tax deductions in India? The answer depends on the type of travel and the purpose of the insurance. While general leisure travel insurance is not eligible, certain policies, such as those linked to business travel or overseas medical insurance under Section 80D, may offer tax benefits.

This article will break down the information on travel insurance tax deduction in a simple manner for you to understand, so keep reading to know more.

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Contents

Are There Any Direct Tax Benefits for Travel Insurance?
Bottom Line
Frequently Asked Questions

Are There Any Direct Tax Benefits for Travel Insurance?

Claiming tax deductions on travel insurance premiums is possible, but only under specific conditions. Although many assume that all insurance policies offer tax benefits, travel insurance is treated differently under Indian tax laws and comes with limited exemptions.

Broadly, you can claim tax benefits on travel insurance in the following cases:

When the policy includes medical coverage
When travel expenses are claimed under Leave Travel Allowance (LTA)
When travel is for business purposes

Let us break these down for better clarity:

1. Travel Medical Insurance under Section 80D

If your travel insurance plan includes medical coverage, you may be eligible for a tax deduction under Section 80D of the Income Tax Act. This section allows deductions on premiums paid for health insurance, including overseas medical insurance.

You can claim up to ₹25,000 for yourself, your spouse, and your children.
An additional ₹25,000 (or ₹50,000 in total if parents are senior citizens) is allowed if you are also insuring your parents.
In total, you can claim up to ₹1 lakh, provided the conditions under Section 80D are met.

Please note that Section 80D is applicable only if the insurance includes a health component. It is not applicable for baggage loss, trip cancellation, etc.

2. Leave Travel Allowance (LTA) Exemption

LTA is a tax-free allowance provided by employers for travel within India. Though the insurance premium itself isn’t tax-deductible, you can claim the travel fare component of your domestic trip (excluding hotel and food) under LTA.

Key points:

You are allowed to claim LTA twice in a 4-year block.
LTA benefits apply only to travel within India, not international trips.
Valid proof of travel and journey details are required to claim the deduction.

For instance, your employer provides you with ₹30,000 LTA, and your travel expense was ₹25,000, then ₹25,000 will be your exemption limit. You can carry forward a maximum of one unclaimed LTA and use it within the first year of the next year’s block.

3. Business Travel Insurance Deduction

If your travel is undertaken for business purposes, and you have purchased travel insurance as part of the official business expense, it may be eligible as a deductible expense for the business. The following are the business travel insurance tax benefits:

This applies to self-employed individuals or business owners.
The deduction must be recorded under professional or business expenses in your income tax filing.

Bottom Line

When you plan your travel wisely, you not only protect your trip but also unlock potential tax savings. You can claim travel insurance tax deduction benefits in two possible ways: Leave Travel Allowance (LTA) for domestic travel and Travel Medical Insurance for international trips.

By staying informed about tax rules, you can easily lower your taxable income. So, always remember to review the latest guidelines or consult a tax expert to maximise your benefits.

Frequently Asked Questions

Can I claim tax deduction on travel medical insurance?

Yes, you can claim tax deduction on travel medical insurance under Section 80D. You can claim this deduction on the premiums paid for the medical insurance for yourself or your family. Both HUFs and individuals, including senior citizens, can make a claim for this tax deduction.

What is the LTA exemption limit?

The exemption limit for LTA deduction is either the LTA your employer has provided or your travel cost. The exemption limit is set on the lower amount.

For instance, your employer provides you with ₹30,000 LTA, and your travel expense was ₹25,000, then ₹25,000 will be your exemption limit.

On the other hand, if your employer provides you with ₹25,000 LTA and your travel expense is ₹30,000. You can only claim ₹25,000 LTA.

What is the eligibility to claim an LTA tax exemption?

To be eligible for claiming LTA tax exemption, you need to fulfil these requirements:

You must be on leave.
It will cover only travel and not your stay or food.
No exemption for international travel.
This deduction only applies to employees and their families.
Not valid for over two children born after October 1, 1998.
You need to provide proof of expenses and a declaration form.

How frequently can I claim a travelling allowance exemption in India?

You can claim LTA tax exemption in India for only two trips in four calendar years. The government generally sets this four-year block, which usually starts from January of an even year and ends in December of the next odd year, for instance, 2022–2025.

Can I claim LTA exemptions for travelling on a public holiday?

No, in most cases, you can not claim LTA exemptions for travelling on a public holiday. This is because almost all organisations are strictly in line with income tax guidelines.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet, and is subject to changes. Please check the policy document for cancelation reasons, and terms and conditions of the policy.