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
Filing your Income Tax Return (ITR) is not just about meeting deadlines—it’s about choosing the…
Retirement planning in India is often misunderstood. Many people think any long-term savings or investment…
You’ve probably seen the same property quoted at different prices. One person says ₹60 lakh,…
Buying insurance is easy. Getting your claim settled—that’s where the real test begins. For any…
Gifting immovable property—like land, plots, or houses—is super common in India. Families often do it…
Most people believe that investing alone is enough to create wealth. But in reality, many…
This website uses cookies.
View Comments
I am a salaried employee
I have a medical insurance (Cashless mediclaim). The medical premium is eligible under section 80/D.
Can I also show medical bills for tax benefit under section 17(2) of income tax act?
Dear Nikhil..If you receive medical allowance, you can submit the bills to your employer and can claim tax exemption up to Rs 15k pa.
i am retired bank employee. I have mediclaim policy where domiciliary treatment expenses are also covered. Whether domiciliary expenses reimbursed are taxable. If so what is the limit
Dear Thobbi Ji..I believe that they are tax-exempt.
I am a salaried employee
I have a medical insurance (Cashless mediclaim). The medical premium is eligible under section 80/D.
I have also another policy (Fixed health plan). Is the premium eligible under section 80/D or Section 80/C
Dear Anil..What is Fixed health plan?
SIR , I HAVE NOT ANY HEALTH INSURANCE POLICY . CAN I CLAIM MEDICAL CHECK UP upto RS 5000/- as tax rebate. for this rebate health premium is neccessary or not, and can i show this medical expenses in cash recipt ?
Dear KULDEEP,
Yes, you can claim up to Rs 5,000 towards health check-up expenses, even if you do not have any health insurance policy.
This deduction can be claimed even amount has been paid in cash.
@Sreekanth will that amount count in 80 C or 80D?
Dear Pragya..its u/s 80D only.
Dear Sreekanth. I am a government servant. I don't get medical allowence as part of my salary. But my medical bills are fully reimbursable as per actual expenditure. What will be the tax implication in that case. For example in FY 2016 17 I got nothing as medical allowence as part of my salary. But I had incurred medical bills of 195000. I submitted the bills and got the entire amount reimbursed. How much tax I will have to pay and under which section ?
Thanks
Mansi
Dear Mansi,
If the reimbursement is not part of your salary as allowance, then it is completely taxable.
Hi Sreekanth,
I have Medical Insurance policies where payments for the same are due in Jan and Feb of each year. These Payments are however made for a policy that covers me from Feb of one year to Feb of another year.In this case (Payment made in Feb 2017 will cover me from Feb 2017 to Feb 2018)
My query is that how can i claim tax benefit when my Employer only accepts proofs of payments made for policies only in FY (April 2016 to March 2017). Is it only the payment that matters here irrespective of the coverage year or both have to match.
Can i show proof of payment done in Jan and Feb 2017 for FY (April 2016- March 2017) which covers me from Feb 2017 to Feb 2018?
Thank you for your help.
Dear Wasif,
Only the payment in the respective Financial year has to match, for claiming tax deduction.
You can submit the previous premium receipt to your employer.
In case, they do not accept it, you can pay the premium in Feb 17, and can claim it when filing your income tax return for AY 2017-18.
Hi Sreekanth,
Thanks for you help in advance!
My dad is a retired employee of a bank which offers a mediclaim policy for its retired employees and their spouses as a group policy. My dad has purchased this policy for himself and my mother.
The insurance company has declined to provide premium receipts since its a group policy. How can I claim tax relief for this?
Dear AD,
Has the premium been charged? (or) is it a part of retiral benefit which is borne by your father's ex-employer?
It has been charged and paid for by us.
Dear AD,
If the premium has been charged and paid by you, you have the right to get receipt for it.
I have mediclaim insurance with premium over 25000 for me, spouse and child (none over 60). The company provides mediclaim insurance as part of CTC (premium about 4600). This covers me, spouse, child AND MOTHER (age 70). How much deduction can I claim - 25000 or 25000+4600 or 25000+(4600/4)?
Dear Atul,
You may have to get the premium bifurcation for your company group cover.
IF it is difficult to bifurcate the premium in a floater a, it then relies on the IT officer to assess the case, if you claim Rs 25k + 4600.
I have more than RS.20000 medical bill for this financial year. But as per rule I can only declare RS.15000. Please let me know whether I can claim that extra while E-filing. If yes then under which section.
Dear Sandip,
If you are referring to medical allowance, you can not claim the balance.
Sir, I do have another related to conveyance allowance which is 1600 max per month. Do we need to submit bills for this too ? And, If we submit can this too be exempted from tax ?
Dear Karthi ..Yes, conveyance allowance of up to Rs 1600 per month can be claimed, no bills are required.