Health is the greatest asset for a human being. Since inflation has made medical bills costlier than ever, having a health insurance policy has its own perks, whatsoever. Investing in health insurance offers amazing returns on investment. You get coverage against expensive hospital bills that can wipe up your savings in one go. It ensures your financial stability when medical emergencies strike. Moreover, you are eligible to avail the tax deductions when you file your income tax returns.

In order to enjoy tax deductions along with health coverage, it is a pre-requisite that you pay the premium of your health insurance policy. On the other hand, if the premium of your health insurance is paid by your employer, you are not eligible to avail the tax deductions. There is no tax deduction on medical allowance paid by the employer to the employees of a company. Under the IT Act, 1961, medical allowance is not considered as an allowance, which is tax exempted.

health insurance premium

Generally, medical allowance is confused with medical reimbursement. Medical reimbursement is paid by an employer to its employees when they submit a specific medical bill. As contrary to the medical allowance, medical reimbursement is tax saving.

Under Section 80D of the Income Tax Act, 1961, the deduction on the health insurance premium has been given to the assesses, the quantum of deduction are as under:

  • In case of the individual, Rs. 25,000 for himself and his family
  • If individual or spouse is 60 years old or more the deduction available is Rs 50,000
  • An additional deduction for insurance of parents (father or mother or both, whether dependent or not) is available to the extent of Rs. 25,000 if less than 60 years old and Rs 50,000 if parents are 60 years old or more.
  • For uninsured super senior citizens (80 years old or more) medical expenditure incurred up to Rs 50,000 shall be allowed
  • A deduction of Rs. 5000 will be allowed under this section for payment of preventive health check-up of either the individual himself or his family members which includes spouse, parents and dependent children. This deduction is NOT in addition to the deduction of Rs.25000/50000 stated above, but is included in the above deduction

Republished with Amendments

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5 Comments

  1. Subramaniyan says:

    Sir,
    I am a senior citizen. I have spent last month Rs 6500/- on medical check up of my wife on advice of Doctor in a private hospital. Being a senior citizen I could not purchase any health insurance. How can I claim the above amount in next year I.e. AY 2018-19.

  2. mohit taneja says:

    I want to know whether expenses incurred on purchasing medicines, various health checkup and medical checkup’s by doctor is covered in this section or not.

    Regards
    Mohit

  3. s pal says:

    There seems to be a contradiction in the article about date of applicability -it says :-
    a> Section 80D is amended from FY 2012-2013
    b> deduction of Rs 5000/- is available from 01-04-2013
    c> Apply in relation to Assessment Year 2013-2014.
    I think b> should be 01-04-2012 as it applies for AY 2013-14.

    A clarification is welcome.

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