Tax Benefits of Health Insurance


Insurance policies not only protect your life and health but also give you tax benefits for the maturity amount received and the tax paid. With a drastic increase in lifestyle diseases, health insurance plans are mandatory. Avail health insurance for parents, children and your spouse. As the health benefits are pretty clear to all, having a Mediclaim policy also gives you tax benefits. The premium that is paid for Mediclaim provides tax benefits by reducing your taxable income and thereby your tax liability.


Following are some of the tax benefits –


  • Section 80D – The premium compensated for Mediclaim and precautionary health checkup

One can claim deduction up to Rs 25,000 for Mediclaim premium paid for spouse, dependent children and self during the term of the financial year. If either your spouse or you’re a senior citizen i.e. greater than 60 years of age, the limit of deduction goes up to Rs 30,000 per financial year period.


One can also claim a deduction of up to Rs 5,000 for precautionary health checkup for children, self and spouse. However the entire tax benefit for health checkup and health insurance is restricted to Rs 30,000 or Rs 25,000.


  • Section 80DDB – Cost of treatment for stated illness

One can claim deduction to the extent of Rs 40,000 for medical expenditures incurred for stated illnesses for self and relatives. The individual can claim for siblings, parents, children and spouse. The deduction limit surges to Rs 60,000 if the quantity is spent for the treatment of a senior citizen i.e. is or above the age of 60 years. The deduction rises even higher to Rs 80,000 if the treatment cost is incurred for a very senior citizen i.e. is or above the age of 80 years.


If the treatment cost has been reimbursed under any other insurance policy then he cannot claim for the treatment cost.


  • Section 80DD – Deduction for treatment expenditure of a dependent with disability

One can claim a reduction of up to Rs 75,000 for expenditure towards rehabilitation, training, medical treatment and nursing of a dependent with disability. Dependent can be siblings, spouse, children and parents.


The amount mentioned above may also comprise of payment towards any other scheme for the care of such dependent. If the dependent has severe form of disability, the deduction limit is Rs 1.25 lacs. For this, you will need to submit a supporting medical certificate.


  • Section 80U – Deduction in case of person with disability

If the person paying the tax is with disability, he can claim an additional reduction of Rs 75,000 under Section 80U of the Income Tax Act. However, there is no relation to treatment costs. If the tax payer has any form of severe disability then the deduction limit will be raised up to Rs 1.25 Lacs.

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