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What are the income tax benefits in health insurance? | FAQ #03
Nov 23, 2017 | 989 VIEWS
To encourage you to take health insurance for your family and yourself, the government has provided certain tax breaks. So in case you pay for health insurance premiums, the amount can be deducted from your income when you calculate the income tax which you need to pay. The health insurance premium is eligible for tax deduction under Section 80D of the income tax act.

Currently tax benefits are provided for health insurance premiums which you pay for yourself, your spouse, kids and parents. You cannot claim any tax breaks for health premiums of any other relatives. The tax breaks are as follows:

 
  Premium paid for Total Deduction
Self, Spouse & Dependent Children Parents  
You, your family and parents are below the age of 60 Rs. 25,000 Rs. 25,000 Rs. 50,000
You & your family are below 60 but parents are above the age of 60 Rs. 25,000 Rs. 30,000 Rs. 55,000
You and your parents are above the age of 60 Rs. 30,000 Rs. 30,000 Rs. 60,000


Please note: These are based on the income tax rules applicable as on date (07-Nov-2017). They may change in future - so please check for the updated rules.

Example:

Suppose you are paying Rs. 17,000 as health insurance premiums in a financial year, this amount can be deducted from your taxable income. 

Here is an example. Suppose your taxable income is Rs. 7,20,000 for the year. 

Tax payable without health insurance = Rs. 71,070
Tax payable without health insurance = Rs. 67,568

So go, go, go get a health insurance and be prepared.

Hope this was useful and helps you understand how you can save tax on health insurance. Happy to take questions on this. Drop in a comment and we will get back at the earliest.

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