Health Insurance Tax Benefits
  • Tax Regime 2025
  • Income Tax Slabs
  • Highlights
Health Insurance Tax Benefits
Buy Policy in just 2 mins

Buy Policy in just 2 mins

Happy Customers

2 lakh + Happy Customers

Free Comparison

Free Comparison

Customized Health Insurance Plan for you.

Get upto 15% Online Discount*

Select Members You Want To Insure

Age of Eldest Member

Simran Kaur Vij
Written By:
Simran

Simran Kaur Vij

Health and Term Insurance

Simran is an insurance expert with more than 4 years of experience in the industry. An expert with previous experience in BFSI, Ed-tech, and insurance, she proactively helps her readers stay on par with all the latest Insurance industry developments.

|
Reviewed By:
Anchita Bhattacharyya

Anchita Bhattacharyya

Health, Term & Life Insurance

Anchita has over 6 years of experience in content marketing, insurance, and healthcare sectors. Her motto to make health and term insurance simple for our readers has proven to make insurance lingos simple and easy to understand by our readers.

Himanshu Kumar

Himanshu Kumar

Term Insurance, Content Writer

Content Manager with heart, mind, and soul dedicated to creating impactful content that exceeds the market standard, delivers and reaches the readers conveniently. Besides producing high-ranking content, my focus lies in creating content that solves user queries and adds value.

Himanshu Kumar

Written By: Himanshu Kumar

Updated on Jan 15, 2025

Himanshu Kumar

Anchita Bhattacharyya

Term Insurance, Content Manager

Content Manager with heart, mind, and soul dedicated to creating impactful content that exceeds the market standard, delivers and reaches the readers conveniently. Besides producing high-ranking content, my focus lies in creating content that solves user queries and adds value.

Reviewed By: Anchita Bhattacharyya

15 min read

Rhishabh Garg
Written By: Rhishabh Garg
Rhishabh Garg
Rhishabh Garg Term Insurance Head
Rhishabh Garg is the Business Unit Head of Term Insurance at Policybazaar.com. He has over 10 years of experience and currently plays a crucial role in shaping the future of term insurance in the company. Rhishabh also has experience in customer services and crafts new strategies for organizational success, one of which is Policybazaar’s claim assistance program.
Santosh Agrawal
Reviewed By: Santosh Agrawal
Santosh Agrawal
Santosh AgrawalChief Business Officer
Santosh Agarwal is the Chief Business Officer of life Insurance at Policybazaar.com and has over a decade of experience in the insurance domain. She has helped shape Policybazaar's life insurance vertical and ensures the effective execution of the company's overall strategy. Santosh is also responsible for the Term Insurance for Women domain at Policybazaar.com and educates the masses about its importance and benefits.

Health Insurance For Tax Savings

One of the long-standing demands from Budget 2025-26 was the increase in health insurance Tax deductions under section 80D. The current limits are INR 25,000 and 50,000 for general citizens and senior citizens respectively. Despite speculations, there were no amendments announced in the Budget for FY 2025-26.

Regardless of the increase in tax deduction limits, certain changes in the tax regime are seen as a boost to increase insurance penetration in India. The insurance sector would now accept 100% of FDI (Foreign Direct Investments), up from the previous 74%.

In this article, we will uncover the different health insurance tax exclusions, their benefits, and how you can take the right advantage of them. Before we move on, let us understand health insurance first.

traordinary Facts

Section 80D of the Income Tax Act, of 1961 has not seen any change in tax deduction limits in a long time. Tax deduction limits were increased from INR 15,000 to 25,000 for general citizens in 2015. While, for senior citizens, the tax deduction limits were increased from INR 30,000 to INR 50,000 in 2018.

What Is Health Insurance?

Most Indians do not believe in preventive medical care. However, witnessing a global pandemic has changed how health insurance is perceived.

Investing in health insurance plans will offer you a financial safety net against hefty medical bills. You and your family are covered for daycare treatments, maternity expenses, and alternative treatments.

Available as individual, family, and group health insurance plans come with tax deductions.

For more information read more on  What is Health insurance? 

New Income Tax Slabs

The budget presented by Finance Minister Nirmala Sitaraman for FY 2025-26, has also introduced new income tax slabs that are as follows

Income (INR)Tax Slabs
0 to 4 LakhsNil
4 to 8 Lakhs5%
8 to 12 Lakhs10%
12 to 16 Lakhs15%
16 to 20 Lakhs20%
20 to 24 Lakhs25%
Above 24 Lakhs30%

Under the new tax regime, individuals earning up to ₹12 lakh annually will not have to pay any income tax. The aim is to reduce the tax burden from the different income sections of society, especially the financially-burdened middle class.

Additionally, more changes are seen like

  • The government will present the new Income Tax Bill
  • Tax Deduction at source will be rationalized for easy compliance
  • Tax deductions Limits for senior citizens doubled to INR 1 Lakh

Introduction To Section 80D

The government of India established section 80D of the Income Tax Act.

Every individual and family (Hindu united family) is eligible to claim tax deductions for 2 kinds of premium payments

  • For self and family
  • For dependent parents

Health insurance tax benefit section 80D applies to all kinds of health plans including top-ups and critical illness. Moreover, Non-resident Indians (NRIs) can also claim tax deductions under section 80D for health plans purchased in India.

Tax Benefits On Health Insurance Eligibility

Indian Nationals and NRIs (Non-Residential Indians) along with Hindu Undivided families (HUFs) are eligible for tax benefits on health insurance under section 80D of the Income Tax Act, 1961.

Tax Deductions Under Section 80D

You can claim the following tax deductions under Section 80D as per the Income Tax Act, of 1961.

Tax DeductionApplicable On Health Insurance
Up to INR 25,000For self, spouse, dependent children, or parents
Up to INR 50,000For parents (60 years and above)
Up to INR 5,000For preventive health check-ups for self, spouse, dependent children, and parents.
INR 25,000For NRIs (Non-Resident Indians)

Tax Benefits On Health Insurance Premium

Let us further understand these tax deductions with examples:

Example 1

Mr. Nitin invests in a family floater health insurance plan. The family floater covers Mr. Nitin, his spouse, and 1 dependent child (all below 60 years of age). The annual policy premium paid is INR 18,000.

Furthermore, Mr. Nitin invests in a senior citizen health insurance plan (both parents above 60 years of age) for which he pays an annual premium of INR 14,000.

As per the table mentioned above, Mr. Nitin is eligible for a claim of up to INR 75,000 under section 80D including INR 25,000 for the family floater health plan and INR 50,000 for the senior citizen health plan.

This shows that the total premium amount of INR 32,000 paid by him for both health plans is well under tax deduction limits and will be refunded at the end of every financial year till the policies are active.

Family Floater Health Plan Premium

Family Floater Plan

INR 18,000

+

Senior Citizen Health Plan Premium

Senior Citizen Plan

INR 14,000

=

Total premium

Total premium

INR 32,000

Example 2

Tax deductions under section 80D including preventive health check-ups.

Mr. Ashok has a family of 6 members

  • Mr. Ashok (35 Years)
  • His Wife (32 Years)
  • 2 Dependent kids (11 and 7 Years)
  • Father (65 Years)
  • Mother (63 Years)
  • Mr. Ashok purchases a family floater plan that covers him, his wife, and 2 dependent children for which he pays an annual premium of INR 30,000. He also pays an additional INR 15,000 for his preventive health check-ups
    CoverActual ExpensesTax Deductions Under Section 80DTotal Deduction Applied
    Premium paid for self, spouse, and childrenINR 30,000INR 25,000INR 25,000
    Amount paid for preventive health check-ups for self, spouse, and childrenINR 15,000INR 5,000INR 5,000
    Total Expenses for Family Floater Health PlanINR 45,000INR 25,000INR 25,000
  • Furthermore, Mr. Ashok pays an annual premium of INR 52,000 for senior citizen health insurance for his parents. He also pays an additional INR 10,000 for his parent’s preventive medical check-ups respectively. Let us understand all the tax deductions for Mr. Ashok through the table mentioned below
    CoverActual ExpensesTax Deductions Under Section 80DTotal Deduction Applied
    Premium paid for senior citizens’ health planINR 52,000INR 50,000INR 50,000
    Preventive Health check-ups for parentsINR 10,000INR 5,000INR 5,000
    Total Expense for Senior Citizens Health PlanINR 62,000INR 50,000INR 50,000
  • The total tax exemptions that Mr. Ashok can avail of with both family floater and senior citizen health insurance in a financial year is INR 75,000.

Tax Deductions In Health Insurance Acceptable Mode Of Payment

Health insurance is truly cashless when it comes to tax deductions. You can claim tax deductions according to section 80D on health insurance premiums paid via all online methods such as UPI, Debit and Credit Cards, bank drafts, cheques, etc. However, health insurance premiums paid in cash are not eligible for tax deductions.

In the case of preventive health check-ups, you are eligible to claim tax deductions through cash as well as digital payments.

Health Insurance Tax Benefits Other Than Section 80D

This may come as a surprise but there are other lesser-known tax deductions applicable on health insurance plans.

We have discussed the same in the section below

  1. Under Section 80 DD

    Under Section 80 DD, the annual limit for tax deductions on taking care of a dependent family member with a disability of more than 80% is INR 1.5 Lakhs. Dependents include

    • Parents
    • Spouse
    • Dependent Children
    • Sibling, or any other family member.

    When filing income tax returns, make sure to submit a medical disability certificate which is issued by the state or central government medical board to claim tax benefits on health insurance.

  2. Under Section 80DDB

    Applicable for individuals and HUFs for availing treatment for a specific illness listed below

    • Specific neurological ailments wherein the disability is determined to be 40% and above
    • Malignant cancers diagnosed and certified by an oncologist
    • AIDS
    • Chronic Renal Failure
    • Haemophilia
    • Thalassaemia

    Tax deduction limits under section 80DDB

    • Up to INR 40,000 for below 60 years
    • Up to INR 1 L for 60 years but below 80 years of age
    • Up to INR 1 L for 80 years and above

Tax Deductions on Long-Term Health Insurance Plans

’I have purchased a 2-year health insurance plan, am I eligible for tax benefits?’ asks a curious customer to our PolicyX insurance expert.

Much to her surprise, we tell her how their health plan with a policy term of 2 years is eligible for tax deductions as per section 80D.

Your health insurer will issue a certificate claiming the amount of premium paid by you so you can avail of proportionate tax deductions under section 80D.

Factors To Keep In Mind To Get The Best Out Of Health Insurance Tax Benefits

Consider these factors before you claim health insurance tax benefits:

  • Make sure to pay health insurance premiums online via UPI, Credit/Debit Card, Bank Draft, Cheque, etc.
  • If you have a family floater health plan and a senior citizen health insurance for your parents separately you can claim tax benefits for both respectively.
  • If you do not have the receipt for health insurance premium payment you are not eligible to claim tax deductions
  • If you do not have a disability certificate from the state or central government medical board you are not eligible to claim tax deductions under section 80DD.
  • You are not eligible to claim tax deductions for health insurance coverage provided to you by your employer.

Final Verdict

If you are under the misconception that health plans are mere protection plans for you and your family against medical bills, you may be mistaken. The multiple tax benefits in health insurance plans are encouragement enough for you to invest in the best health plans.

To understand how sections 80D, 80DD, and 80DDB are your financial saviours, refer to the article above. For any further clarification contact us at 1800-4200-269.

Choose Right Insurance Banner Choose Right Insurance Banner

Consult for Personalized Insurance Advice

Contact With Advisor

But how does it work?

Schedule a call with India’s number 1 trusted advisor with a 4.5+ rating on Google. We are not your average insurance agents. Our advisors are experts in their insurance knowledge and will give you the right information at the right time. The service is free of cost! Don’t worry, we won’t spam as we value your time.

Choose Right Insurance Banner Choose Right Insurance Banner

Health Insurer Network Hospitals

Health Insurance Tax Benefits: FAQs

1. What are the tax benefits of health insurance?

Individuals and Hindu United Families (HUFs) are eligible for tax benefits under section 80D of the Income Tax Act, of 1961.

2. What are the tax deduction limits as per budget for FY 2025-26 under section 80D, of the Income Tax Act, 1961?

As per the latest budget of FY 2025-26, the tax deduction limits under the Income Tax Act, 1961 are up to INR 50,000 for senior citizens, and up to INR 25,000 for general citizens.

3. How much tax exemption can I avail on preventive health check-ups?

Preventive health check-ups are eligible for up to INR 5,000 tax deductions under section 80D of the Income Tax Act.

4. What is section 80DD?

Under section 80DD the annual limit for tax deductions on taking care of a dependent family member with a disability of more than 80% is INR 1.5 Lakhs. Make sure to issue a medical disability certificate to showcase when filing for annual tax returns.

5. What are the latest announcements for the Insurance Tax regime in the budget of FY 2025-26?

The biggest move made by Finance Minister Nirmala Sitharaman was to eliminate the FDI capping opening up the opportunity for increased foreign investment, enhanced competition, and an increase in insurance penetration, especially in suburban and rural areas.

6. Is there any increase in tax deduction limits in the budget for FY 2025-26?

No, there were no new announcements for tax deduction limits for the FY 2025-26 budget.

Health Insurance Companies

Share your Valuable Feedback

Rating Icon

4.4

Rated by 2627 customers

Was the Information Helpful?

Select Your Rating

We would like to hear from you

Let us know about your experience or any feedback that might help us serve you better in future.

Reviews and Ratings
Simran Kaur Vij

Written By: Simran Kaur Vij

Simran is an insurance expert with more than 4 years of experience in the industry. An expert with previous experience in BFSI, Ed-tech, and insurance, she proactively helps her readers stay on par with all the latest Insurance industry developments.