Health Insurance or Mediclaim insurance is a must-have for all. Considering the rate at which medical costs are rising, it is very important to have sufficient medical insurance coverage. Absence of health insurance may wipe out your savings. Having sufficient coverage will safeguard you and your dependents from getting into financial crisis during hospitalization or critical illnesses’ treatments or accidents.
Besides medical coverage, health insurance plans can provide Tax benefits to you. In this post, let us understand the Tax deduction benefits that are available for Health Insurance (or) Mediclaim plans.
The premium paid towards medical insurance is tax deductible under section 80D (u/s 80D) of the Income Tax Act, 1961.
You can claim tax deductions, provided you are paying the premium on a mediclaim policy which is in the name of
Health insurance premium paid for Self, Spouse or dependent children is tax deductible upto Rs 25,000. Earlier the limit was Rs 15,000 and this limit has been increased to Rs 25,000 in Budget 2015-2016. If any one of the persons specified is a senior citizen and Mediclaim Insurance premium is paid for such senior citizen then the deduction amount now is Rs. 30,000. From Financial Year 2015-2016, this limit is increased to Rs 30,000 from Rs 20,000 (applicable in FY 2014-2015).
Below table shows you the quantum of tax deductions applicable on health insurance premiums. The below limits are applicable for Financial Year 2017-2018 (or) Assessment Year (2018-2019).
Let us understand the above scenarios with couple of examples..
Example 1 : Mr Reddy (30 years) has employer’s mediclaim coverage. He pays Rs 8,000 as premium. The coverage is applicable for Mr & Mrs Reddy and their son. He has also included his parents (father 55 years & mother 52 years) under his employer’s medical insurance scheme. For parents coverage he pays Rs 16,000. He wants to know how much he can claim as total tax deduction under Section 80d?
Since no one in the family has attained 60 years of age, Mr Reddy can claim a tax deduction of Rs 24,000 (Rs 8000 + Rs 16,000).
Example 2 : Mr Gupta (45 years) is a self-employed person. He has taken Health insurance plan and pays a premium of Rs 26,000. He also pays Rs 31,000 towards his parents’ coverage ( his Father’s age is 62 years & mother’s age is 58 years). What is the total tax deduction application in his case?
Mr Gupta can claim a total tax deduction of Rs 55,000 only (Rs 25,000 + Rs 30,000)
Important points on Medical insurance policies & Tax benefits
Preventive Health checkup & Section 80D
Preventive health checkup (Medical checkups) expenses to the extent of Rs5,000/- can be claimed as tax deductions. Remember, this is not over and above the individual limits as explained above.
Example – Mr Mehta (65 years) has mediclaim policy and paid Rs 25,000 as premium . He also spent Rs 6,000 towards health check-up. He wants to know what is the total tax deductible amount?
Since he is a senior citizen, the medical insurance premium to the extent of Rs 30,000 can be claimed as tax deduction under Section 80D. Even though he incurred Rs 31,000 ( Rs 25 k + 6k) as expenses, he can only claim tax deduction to the extent of Rs 30,000 only.
Budget 2015 : Deduction u/s 80D on health insurance premium will be Rs 25,000, increased from Rs 15000. For Senior Citizens it has been increased to Rs 30,000 from the existing Rs 20,000. For very senior citizen above the age of 80 years, not eligible to take health insurance, deduction is allowed for Rs 30,000 toward medical expenditure.
Difference between Mediclaim (Section 80d) & Medical Allowance (Section 10):
Do not get confused between your medical reimbursement allowance and mediclaim expenses. Medical allowance is provided by your employer. It is part of your employment agreement (salary structure) between your employer and yourself.
You can get medical allowance upto Rs 15,000 as an exempted income from your Gross salary. To claim this, you need to submit medical bills to your employer and get the allowance benefit. The medical reimbursement allowance is exempted under Section 10 of the Income Tax Act.
If you have submitted medical bills (to your employer) towards medical allowance and also paid premium towards your mediclaim (health insurance) then both of them will be listed in your Form-16 under different sections as shown below (click on the images to open them in new browser window).
(Continuing with Mr Mehta’s case, Mr Mehta incurred Rs 6000 as medical check-up costs. Upto Rs 5000 can be part of his tax deduction under Section 80d as mediclaim premium and the remaining Rs 1000 can be exempted under Section 10D as medical allowance provided he is employed).
If your employer provides medical insurance then in most of the cases it is automatically included in your Form-16. If you have independent mediclaim policies (or) you hold medical insurance plan as a self-employed person then do not forget to claim tax deductions. Show your medical insurance premiums under Section 80D while filing Income Tax Returns.
Budget 2018-19 Update :
Related Articles :
Please share your comments. (Image courtesy of digitalart at FreeDigitalPhotos.net)
This post was last modified on July 10, 2023 12:02 pm
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View Comments
Hi Sreekanth,
I got my PF amount 88K withdrawn from my last company in august-2015. Do I need to show it somewhere? If yes, Where excatly can I show that while submitting my tax form? Under “OTHER INCOME”?
Also, How shall I know that how much interest I earned on my total PF amount which would be taxable?
Please help !!
Dear Nishant,
If your contributions were for more than 5 years, then EPF withdrawal is tax exempted.
Otherwise, kindly go through below articles to know more details;
EPF withdrawal & new TDS rules.
TDS & misconceptions.
Hi Srikanth,
Your Website is very informative. Thank you for your efforts.\
I am salaried person and am covered under corporate mediclaim policy of 7.5 lakhs. I am planning to take a seperate health insurance policy of 10 Lakhs from Royal Sunderam Lifeline supreme. I am skeptical about the company service and sustenability. My ag3 36 M, Wifer 30, two kids 4 and 2 years.
The advantages I see are:
1. 100% reload.
2. no cap on room rent.
3. 5 succesive no claim years results in doubling the insured amount. since I am covered under official policy this will be useful after that. Effectively cover would be 20Lacs after 5 years and would remain there even if we claim from 6th year. This varies with other insurers where they reduce the sum insured to original.
Do you recommend this insurer, and your comments on my understanding.
Thanks a lot,
Best Regards,
_Subhash
Dear Subhash,
If you are comfortable taking a health cover from Sundaram, suggest you to shortlist some other company's plan. But kindly note that Indian insurance industry is well regulated one. You may visit this article and try to do some more research about other possible options. Read : Best portals to compare health insurance plans.
Hi,
My father is 69 years old and mother is 64 years old. Please let me know which health insurance policy shall I buy for them which will cover all diseases.
Thanks.
Dear BISWADEEP,
Kindly go through below articles;
Best Health Insurance plans for Senior Citizen Parents.
Best websites for comparing medical insurance plans.
Hi, I am salaried employee working in a IT company. Marital status - single. Under Section 80 D. can i claim exemption for medical insurance premium paid by my father(61 yrs) and mother (56 yrs).
Note: Parents have paid for the premium using their own cheque \ cash
Dear Padma Priya,
Kindly note that the Premium amount can not paid in cash. Mode of payment can be anything (through credit card, net banking etc.,) except cash payment.
If you have not paid the premium, you can not claim tax deduction.
Hi,
I am working with MNC. My father undergone for eye surgery in dec 2015 which costed Rs 22k. Can I submit and claim this bill now under my Medical Allowances which is fixed 15k for tax exemption during FY 2015-2016 tax submission ? Does this company medical allowance covers medical exp bill for my parents, brother/sister? Please assist.
Dear Nishant..Yes you can claim up to Rs 15k. You can submit the bills to your employer (suggest you to take a copy of the bills before you submit to your employer).
I have laid medical premium in the year 2015 feb28 for the year 2015-16.. Now can I claim tax deduction in this year .
Dear Lakshmikant..You should have claimed it for the FY 2014-15 or AY 2015-16.
In case if you have paid or going to pay now in this month then you can claim that for this FY 2015-16 / AY 2016-17.
Dear Sir,
As my company has asked me to submit the medical bills for tax exemption .As i have not kept any bills with me can i submit the bills of SBI Insurance & LIC which i am paying quarterly.
Please advice & thanks in advance.
Thanks Sir ....
Dear Parameswar..You can not submit Life insurance premium receipts to claim tax deductions u/s 80d.
Dear Sreekanth,
I am a salaried Govt. employee. My spouse is a housewife with no source of income. Recently she has gone for a Family health optima (star health insurance) plan (she me and our son are the insured one) with a premium of Rs. 12050/- (excluding service tax) which was paid by me. Can I get tax benefit under Sec. 80 D of IT act?
Regards,
Akshaya
Dear Akshaya..Yes you can claim the tax deduction.
I have a query in relates to medical reimbursement. I have a bill of Rs 85000 and I claimed under mediclaim Rs 50000. Now can I submit the same bill for Medical reimbursement to avail exemption of Rs 15000.
Dear Savi..You can not do so.
Thanks for your reply.
Can you please tell me the reason why I cannot do??
Dear Savi,
Small correction:
If your Mediclaim company partly reimbursed you, you can then submit the original bill to your company for your reimbursement, If your Insurance Company returns all the original bill(s) to you.
I AM 64 YEARS OLD AND MY MOTHER IS 82 YEARS OLD
MY PREMIUM IS 22880 AND I MEDICAL EXPENSES BILL IS ARROUND 6750
AND MY MOTHER MEDICAL EXPENSES 38000
PLS REPLY ME HOW MUCH I GET EXEMPT FROM INCOME TAX UNDER 80D
Dear Amit Ji,
Medical expenses is not part of Mediclaim premium.
Kindly understand the difference between Mediclaim & medical allowance, I have explained about this in the above article.
You can claim Rs 22,880 u/s 80D.
Dear Sreekanth,
As you said one can claim tax rebate of up to Rs. 30,000 in case of Very Senior citizen ( Preventive Health Check up ) Expenses. Please Explain below scenario.
My self salaried ( 45 Years) and my parents are Very Senior Citizens. I Spend around Rs. 25,000 for my parents Health Checkups and I had a policy of Rs. 15,000 and I spent Rs. 5,000 on my Preventive Health Checkups. What is the amount I can Claim.
Regards,
Chandrashekar Reddy
Dear Chandrashekar,
Kindly note that Preventive health checkup (Medical checkups) expenses to the extent of Rs5,000/- only can be claimed as tax deductions (including all the family members). You can claim Rs 20,000 only u/s 80d.
However, Budget 2015 has proposed that as very senior citizens are often unable to get health insurance coverage and are therefore unable to take tax benefit under section 80D.
Accordingly, as a welfare measure towards very senior citizens ,it is also proposed to provide that any payment made on account of medical expenditure in respect of a very senior citizen, if no payment has been made to keep in force an insurance on the health of such person, as does not exceed thirty thousand rupees shall be allowed as deduction under section 80D.