Heres how to claim mediclaim deduction and get tax benefits

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21 Jul 2023

Understanding Section 80D of the Income Tax Act for Health Insurance Tax Exemptions

Medical emergencies can not just cause physical stress, but they can hit your hard-earned savings hard. The way healthcare costs are increasing, investing in a suitable medical insurance plan is imperative. While every health insurance plan comes with a long list of coverage features did you know a major advantage of having a mediclaim policy is that you can get tax benefits as well. In order to encourage people to invest in health insurance, the government offers tax exemptions as per Section 80D of the Income Tax Act.

Understanding Section 80D

Under Section 80D, an individual or Hindu Undivided Family is eligible to claim a tax exemption for the premium that is paid for the health insurance policy. The exemption can also be claimed for top-up or super top-up plans and critical illness plans. The deductions can be from INR 25,000 up to INR 1 lakh.

Eligibility for claiming tax benefits under Section 80D

If you are paying a health insurance premium for yourself or the following, you can receive tax benefits:
1. Spousebr
2. Children who are financially dependent on you
3. Parents.

Tax deductions under Section 80D

The table given below will help you understand the tax benefits you can claim against your medical insurance.

Category

Amount of premium paid

Self/ family

Parents

Total Deductions

Individuals and their parents who are below 60 years

INR 25,000

INR 25,000

INR 50,000

Individuals and their family who are below 60 years, but parents are above 60 years

INR 25,000

INR 50,000

INR 75,000

The policyholder, as well as his parents, are over 60 years

INR 50,000

INR 50,000

INR 1 Lakh

Things to keep in mind when claiming mediclaim deduction

When making a claim against your medical insurance policy, keep the following pointers in mind:
1. The premiums that you pay should not be made in cash, else you would not be able to file for a claim. Make sure you make the payment via cheques, demand draft, net banking, credit/ debit card, etc.
2. The maximum amount that you would be able to claim is INR 1 lakh
3. Paying the health insurance premium for your siblings, in-laws, and other relatives, would not help you get tax benefits
4. The exemptions are available on the premium, not on the applicable GST, service charges, etc.

Your health insurance policy offers you dual benefits. It does not just help you manage any high-cost medical treatment, but also allows you to save all the more with tax benefits.

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Team Kotak GIC

The content of this blog has been created and carefully reviewed by the esteemed team at Kotak General Insurance, with the sole purpose of providing valuable guidance and sharing insights on the importance of general insurance. Our objective is to assist users in making informed decisions when purchasing or renewing insurance policies for their cars, bikes, and health. Our expertly curated information aims to empower our readers with the knowledge they need to protect their valuable assets and financial interests.