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Tax Benefits in Health Insurance u/s 80D (Individual, Family and Senior Citizens)

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Tax Benefits in Health Insurance under section 80D (Individual, Family and Senior Citizens)

Health Insurance helps you to save hard earned money from sudden medical emergency where hospitalization is required. Hence, financial advisors keep indicating that health insurance is the crucial part of the financial planning.  Amount paid towards health insurance premiums, preventive health checkups, medical expenditure etc. are eligible for tax benefits u/s 80D. In this article we would discuss about various Tax Benefits in health insurance u/s 80D for individuals, family members and senior citizens.

What is Health Insurance Plan?

Health insurance provides medical coverage in case of hospitalization. Health insurance covers hospital bills, pre and post hospitalization expenses, surgery expenses, ambulance charges etc. The features of medical insurance would vary depending on plan to plan and company to company. While you choose one of the Best Health Insurance Plans in India, you can also enjoy tax benefits on the health insurance premiums.

Tax Benefits for Health Insurance u/s 80D (Individual, Family and Senior Citizens)

Every individual or HUF can claim a deduction pertaining to health insurance from total income during the financial year u/s 80D.  Here are various deductions available to claim.

#1 – Tax benefit of individuals and parents below 60 years

Individuals who are under 60 years of age can claim tax benefits for the medical insurance premiums up to Rs 25,000. The health insurance should be for self, spouse and children.

In case the individuals have parents who are less than 60 years, they can claim additional Rs 25,000 towards their health insurance premium.

The maximum amount of eligibility for self, spouse, children and parents would be Rs 50,000 (25,000+25,000) which can be claimed u/s 80D.

#2 – Tax benefit of individual and parents above 60 years

If the parents are above 60 years, they one can claim Rs 50,000 towards their health insurance premium.

In this case, the maximum amount of tax eligible for self, spouse, children and parents would be Rs 75,000 (25,000 + 50,000).

#3 – Tax benefit – If both individual/family and parents above 60 years

In case individuals, family members are above 60 years of age, an amount of Rs 50,000 is eligible for income tax for the health insurance premium paid.

In case individual have parents, who are above 60 years, the tax benefit of Rs 50,000 can be availed.

The total eligibility in this case would be Rs 1,00,000 in a financial year (50,000 + 50,000).

#4 – Medical expenditure for Senior citizens in absence of health insurance

If senior citizen has chosen a good health insurance plan, no worries. In case senior citizen does not have medical insurance or have medical insurance only part of the eligible amount, they can claim medical expenditure up to Rs 50,000 in a financial year including health insurance premiums or preventive health check-up premiums paid put together.  E.g. If the senior citizen has health insurance + prevent health check-up paid totaling to Rs 20,000. They can claim the balance of Rs 30,000 based on medical expenditure bills during the financial year. Overall limit should not cross Rs 50,000.

#5 – Tax benefit for Members of HUF

Members of Hindu Undivided Family (HUF) can claim tax benefit for health insurance premium paid up to Rs 25,000 for self/spouse/kids/parents. No separate tax exemption available for health insurance premium paid for parents.

#6 – Tax benefit for NRIs

In case NRIs have a health insurance policy in India, they can avail tax benefit of Rs 25,000 towards self, spouse, children and parents put together. No separate exemption is provided for health insurance premiums paid towards parents.

In the above scenarios, super senior citizens are considered like any other senior citizen and no separate exemptions available.

#7 – Payment towards preventive health checkups

An amount of Rs 5,000 is eligible for income tax deduction for the amount paid towards preventive health checkups for self/spouse/children and parents all put together. One should note that this amount is part of overall eligible limit indicated in the above scenarios.

Summary of tax benefits in health insurance u/s 80D

Category Self, Spouse and Children Parents Eligible Deduction u/s 80d
Individuals with parents < 60 years 25,000 25,000 50,000
Individuals below 60 years with parents > 60 years 25,000 50,000 75,000
Both Individuals and parents > 60 years 50,000 50,000 1,00,000
Medical Expenditure – Sr Citizens NA 50,000 Upto 50,000 within the overall 80D limit for Sr Citizens
Members of HUF 25,000 25,000 25,000
NRIs 25,000 25,000 25,000
Preventive Check-ups 5,000 5,000 Upto 5,000 within the overall 80D of individuals and parents
Suresh KP

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