Health Insurance Tax Exemption – Complete Guide to Deductions & Benefits

Key Insights 

1. You can claim a tax benefit of up to ₹1,00,000 under section 80D when you pay health insurance premiums for yourself, your spouse, your children, and your senior citizen parents.

2. If your parents are 60 or older, you can claim a higher tax exemption for their health insurance. The deduction limit is ₹50,000 for each parent.

3. Save your premium receipts, policy certificates, and proof of non-cash payments. These documents will help you claim your 80D deduction for yourself and your parents.

Did you know the health insurance tax exemption will lower your tax bill? Let’s see how? The health insurance tax exemption in new tax regime offers a health insurance tax exemption that can help you save money. Here’s how it works.

The health insurance tax benefit 80D limit acts like a reward for looking after your family's health. This deduction always applies to the premium you pay for your insurance and lowers your taxable income. 

How much you save through the new tax slab depends on your age and whether you insure your parents.

Last year, I paid ₹25,000 for my own health insurance and ₹30,000 for my senior citizen parents. With the help of the 80D deduction limit for parents, I claimed a total of ₹55,000. This helped me save a good amount of money on taxes and made a good decision for my future or my parents' future.

Eligibility Criteria for Health Insurance Tax Exemption

Not everyone is eligible for health insurance tax exemption. Find out who can claim the health insurance tax exemption under Section 80D and learn how you can save more.

Here is the table which helps you understand the eligibility criteria for the health insurance tax exemption: 

To claim your 80D deduction, check that you, your spouse, children, or parents are named as the policyholders and beneficiaries.

Bonus Tip: Do you know? A ₹60,000 contribution to PPF qualifies for tax deduction under Section 80C, just like EPF and other recognised provident funds.

Deduction Limits Under Health Insurance

Make the most of your yearly tax benefits. Find out how much you can save on health insurance with the deduction limits under Section 80D.

Section 80D1 offers different deduction limits based on the age of your insured family members and your taxpayer category. 

You can claim these deductions for health insurance premiums, CGHS contributions, and preventive health check-ups. Covering senior citizens lets you claim higher deductions, helping you save more and improve your medical coverage.

The table below shows which deductions are allowed in different situations:
 

Check that your premium payments fit your age and your family’s deduction limits so you can get the best tax benefits.

Bonus Tip: Do you know? Form 16A is a quarterly TDS certificate that shows the TDS amount, payment type, and tax deposited with the Income Tax Department.

Required Documents for Health Insurance Tax Exemption

Make sure you get your tax claim by finding out which documents you need for the health insurance tax exemption under Section 80D. This will help your application go smoothly.

• Health Insurance Policy Documents: Keep copies of your policy certificate that list everyone covered and the terms of your insurance.
• Premium Payment Receipts: Save the original receipts for all health insurance premiums you paid during the year. Make sure each receipt shows the amount paid and the covered members.
• Proof of Payment: Keep bank statements, credit card statements, or cancelled checks that show your premium payments. Remember, you must pay health insurance premiums using non-cash methods like cheque, net banking, or UPI to claim a deduction.
• Medical Expense Bills (if applicable): If you are claiming deductions for medical expenses for senior citizens (age 60+) who do not have health insurance, keep all original bills and payment receipts for doctor visits, lab tests, scans, x-rays, and treatments.
• Invoices for Preventive Health Check-ups: Keep invoices and receipts for preventive health check-ups, up to ₹5,000 within the overall limit. You can pay for these check-ups in cash.
• Aadhaar and PAN details: You may need these for verification when filing your taxes.

Keep your premium receipts, policy certificates, and payment proofs ready in case you need to verify your Section 80D claim.

Conclusion

Through this blog, you can learning how the health insurance tax exemption can help you keep your family healthy and save money. If you know about the new regime benefit, use the 80D deduction for parents and seniors, and keep good records, you can lower your yearly taxes.

FAQs

What is the tax on health insurance? 

Starting September 22, 2025, India will not charge Goods and Services Tax (GST) on individual health insurance premiums. So, when you buy or renew a personal health insurance plan, including family floater or senior citizen plans, you will only pay the base premium.

The government changes gst on health and life insurance from 18% to 0%. Wait or buy new insurance? 

Starting September 22, 2025, the government of India will remove GST (Goods and Services Tax) from all individual life and health insurance premiums, lowering the rate from 18% to 0%.

How does medical insurance help us get an exemption from paying taxes? 

Medical insurance can lower your tax bill because you can claim the premiums you pay as a deduction from your total income. This means you pay taxes on a smaller amount.

How do policyholders claim tax benefits under Section 80D of the Income Tax Act for health insurance premiums? 

Under Section 80D, taxpayers can claim deductions for premiums paid for medical insurance for themselves, their spouse, and their dependent children. The maximum deduction allowed under this section is Rs. 25,000 per year for self, spouse, and dependent children.

Can I claim medical bills under 80D?

Yes, you can claim medical bills for your senior citizen parents under Section 80D if they do not have health insurance.
 

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