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 :
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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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Dear Sir, I paid for my mother's cataract surgery of which only a partial amount of 20,000 out of total of Rs.40,000 has been reimbursed by the insurance policy that I had opted for. Can I claim the tax exemption of Rs. 15000 (under section 17(2)) out of the remaining 20,000 amount which has not been reimbursed by the insurance Provider. If yes, then how would I furnish the original bills if asked for by my employer as the Bills are with the insurance company.
Dear Hitesh,
If you get medical allowance as part of your salary, then medical reimbursement of up to Rs 15,000 can be claimed as exemption.
You may request your insurer to provide you with copies of bills or return the original bills so that you can claim the balance amount with your employer.
Hello Sir, Do you have any sample document that can be submitted to the corporate company, which can be submitted as the supporting documentary evidence against preventive medical health check up expenses claimed under section 80 D ?
Dear Karthi,
You can submit photocopy of of the bill paid towards health-check-up to your employer.
Thank you Sir. Is this health checkup is interlinked to medical insurance premium or without taking any premiun also, whether I can make use of this. I would like to go for preventive medical health check up for myself and my spouse, parents. How much I am eligible to claim for each of them , during filing my tax?
Dear Karthi..Without taking insurance also you can claim 80D if you have incurred health-check-up expenses. It is up to Rs 5k per family.
Hi Sreekanth Reddy,
I take my father for doctor check up every 3 months. A receipt is given as Consultation Fee. Each consultation is charged Rs.500. Can i claim Rs 2000 (4 visits * Rs.500) under Preventive health check-up.
Dear Raj,
Wikipedia explains the meaning of Preventive Health Check Up perfectly “Preventive healthcare (alternately preventive medicine or prophylaxis) consists of measures taken for disease prevention, as opposed to disease treatment“.
Further, it adds ” Health, disease, and disability are dynamic processes which begin before individuals realize they are affected. Disease prevention relies on anticipatory actions that can be categorized as primary, secondary, and tertiary prevention“.
If you believe that 'doctor check-ups' fall under this definition then you can claim tax benefit.
Read : Health Insurance Tax Benefits (under Section 80D) for FY 2018-19 / AY 2019-20
hello sir,, i have a health insurence includes my parents (father-62 mother,55)for Rs.2162 paid by employer ,and no other medical allowances .I have spent 20000 /- towards my father health checkup and medical treatment.my self i have spent 10000/- towards health checkup and medicines.how much amount i can get under tax exemption. do i need to provide original bills to my employer.
Dear SRAVANTHI,
For claiming medical allowance, the ceiling limit is Rs 15,000 by producing original bills to your employer.
You can claim premium paid and up to Rs 5,000 towards medical checkup under section 80D.
Dear Reddy,
Greetings for the day. First of all thanks to you providing solutions for the customers.
I am a employee. As per my form-16 my Gross Total Income Rs.380641.00 for the financial 2016-2017
Total deductions Rs.4797.00.
At the end of the year i have forgot to submit the medical bills at my Employer. I have spent Rs.30,000.00 in that year, and also i have health insurance policy it covers Rs.5242.00 under 80D.
If, now i want to file my IT returns. Can i able to add my medical bill's amount under 80D? If yes, how much amount i can add. Can you please guide me.
Thanks & Regards.
Dear Abdul,
Have you filed your ITR in time?
Even if it is a belated return/revised return, you can claim Rs 5,242 u/s 80D.
But you can not claim the medical allowance.
Kindly read: Income Tax Declaration & List of Investment Proofs
I have a floater policy for myself and my wife. A premium of Apprx 20,000 is paod per annum. Can we both claim rebate of Rs 10,000 each under 80D
Dear Sanjeev..May I know who is paying for the premium?
If I am to claim tax relief against premium paid towards my parents' mediclaim what proof do I have to show to my employer/while efiling.
Dear Snehashis,
You can submit receipt of premium paid to your employer. There is no need to submit any proofs along with your ITR.
My husband (aged 62, and I am 60) has taken out a family floater policy(himself, wife, son, daughter) a few years ago in his name, for which he pays a premium of approx. 80K a year. Our son (salaried) now wishes to pay the premium and also avail of the tax benefit. 1. Can he pay the premium for this family floater policy even if it is in his father's name, and avail tax benefit under section 80D? How much tax benefit can he avail under section 80D if he pays the premium?
My son has his own medical policy for which he pays a premium of Rs.3000/- only. Can he claim a tax rebate on this under any section, separately?
Can he also claim medical expenses (health check-up and medicines for himself and also his parents) in any way, under any other section?
Thanks for your advice.
Dear Abha Ji,
General suggestion : Most of the plans provide insurance cover for kids till they attain 18 or 21 years of age. It is prudent to buy individual health insurance plans from the same company and they can get the benefits of policy continuity. The premium on floater plans is dependent on the age of the eldest member in the group.
1 - Yes, he can pay the premium and claim the tax benefits. He can claim max Rs 55k (including his Rs 3k separate policy).
2 - He can claim medical allowance by submitting the bills from his employer for up to Rs 15 pa.The medical reimbursement allowance is exempted under Section 10 of the Income Tax Act.
Thank you. However, in the family floater plan, my son and daughter, though above the 21 and 18 year age, are also covered. That is correct, isn't it?
I do understand your suggestion that the children should have individual health insurance in their names to get long term benefits. Thank you for this.
From your table it shows tax benefit can be claimed as 35,000/-under section 80D.
How does my son claim the remaining 20,000? Please do specify.
Thanks again
Abha
Dear Abha Ji,
It depends on the Plans Terms & Conditions (reg Kids' age & coverage).
As the health insurance premium is paid for self+Parents the max he can claim is Rs 25k + Rs 30 K.
I am 62 years old pensioner and also doing consultancy. My wife is 55 and working. I paid Rs 40,000 towards her medi claim policy. can I claim IT benefit for myself?
Dear saurabh Ji..Yes, but subject to the above ceiling limits.
Sir I am a disabled person with disability of 60%. i have mediclaim policy of INR 11879. Can I claim 75000/- under 80U and also 11879 under section 80D?
Dear SATISH ..I believe that can claim both tax deductions.
Dear Sreekanth,
Our company provides group mediclaim insurance coverage for self, spouse & upto 2 children and it pays the premium to the insurer directly and not deducted from the employee. They gave us an option to include the parents and the premium for this additional coverage should be borne by the employee. I've opted for the same and my employer deducted the additional premium amount from my salary. Will I be eligible to get tax exemption for that amount which is deducted from my salary?
If yes, the insurance company didn't provide any receipt or certificate for the same. Should I need to get any certificate or letter (if you have any sample certificate template, pls let me know) from my employer and submit it for tax exemption?
Awaiting your reply.
Regards,
Vani
Dear Vani,
Yes, you are eligible to claim the deducted amount u/s 80D.
There is no need to submit any investment/expenditure proofs to the IT dept.
If the amount is deducted from your salary, it is more than enough to be considered as a proof.
Read:
Income tax declaration & investment proofs.
Thank you!