Medical insurance is a critical aspect of financial planning and can have a significant impact on your overall financial health. Not only does it provide you with access to essential medical services, but it also offers numerous tax benefits that can help you save money and reduce your tax burden. This article aims to educate readers about these benefits.


It will also provide information on how to claim premium deductions on your tax return. So whether you are an individual seeking coverage for yourself or are looking for a mediclaim for family welfare, this article will provide you with valuable information on how the tax law has made medical insurance more accessible and affordable.

Health Insurance Plans

Tax Implications of Health Insurance

The government has made provisions under Section 80D of the Income Tax Act to encourage citizens to obtain a health plan. As per this section, the premium paid on a mediclaim policy can be deducted from the taxable income. It is offered over and above the deduction under Section 80C. The insurance policy can be taken for self, spouse, dependent children, or parents. Eligibility conditions under Section 80D are listed below:


  • Individuals and Hindu Undivided Families (HUF) can receive tax benefits under this section. Other entities, like companies, partnership firms, etc., are not covered.


  • In addition to the medical premium, costs related to health check-ups are also covered.


  • Medical expenses incurred on a senior citizen (aged 60 years or above) who does not have insurance policy coverage can also be claimed.


  • Contributions to the Central Government Health Scheme or other schemes notified by the government are also eligible.


Limits for Section 80D Deductions

The following table presents the health insurance tax benefit limits in different scenarios.


Self below 60 years;

Parents below 60 years

Self below 60 years;

Parents above 60 years

Self above 60 years;

Parents above 60 years

Deduction for self, spouse & dependent children ₹25,000 ₹25,000 ₹50,000
Deduction for parents ₹25,000 ₹50,000 ₹50,000
Maximum deduction ₹50,000 ₹75,000 ₹1,00,000

Steps to Claim Tax Deduction on Medical Insurance Premiums

You can claim the health insurance tax benefit while filing income tax returns by following the below-mentioned steps:


  • Select ‘80D’ in the ‘Deductions’ column of the income tax return.
  • A drop-down menu will appear with seven scenarios under which the deduction is available. Choose the option that applies to you, for instance, self and family, self(above 60 years) and family, parents, parents(above 60 years), etc.
  • Attach supporting documents to aid the verification process of the Income Tax (IT) department.

Points to Remember

To avoid any complications in your tax calculation, you should take note of the following:


  • Premiums must be paid in modes other than cash, such as cheques and electronic payments. The premium obligations can be calculated using the online medical insurance calculator
  • Relatives like brothers, sisters, grandparents, uncles, aunts, and working children are not covered.
  • Group health insurance premiums paid on behalf of employees can not be claimed as a deduction.
  • GST and cess charges levied on premiums paid can not be claimed.


Other Deductions Available for Medical Expenditure

In addition to Section 80D, you can take the help of the following provisions to reduce your tax liability:


  • Section 80DD: 

If you are an individual/ HUF and have incurred expenditure on maintenance of a dependent who suffers from a disability, you can claim ₹75,000 as a deduction ( ₹1,25,000 for severe disability).

  • Section 80DDB: 

Deduction is also provided for medical treatment of specified diseases for self or relatives to the extent of ₹40,000. 

  • Section 80U: 

Persons who have a disability can enjoy a tax benefit of ₹75,000 ( ₹1,25,000 in case of severe disability).



In addition to understanding the tax treatment of insurance premiums, you must also estimate the overall policy cost using an online mediclaim calculator. If you are searching for a health insurance calculator in India, many great options are available. They will enable you to select a plan that fits your budget and improves your financial well-being. So, what are you waiting for? Get a mediclaim policy now.