Income Tax Returns: How To Claim Deductions For Health Insurance Premiums

When it comes to reducing your income tax liability, one of the most effective options is claiming deductions on health insurance premiums. Under Section 80D of the Income Tax Act, 1961, taxpayers can avail significant tax benefits by buying health insurance for themselves and their families.

As the ITR filing season of Financial Year 2024-25 (Assessment Year 2025-26) has already started, it’s time to gather all proofs to claim deductions. It’s important to note that you can only claim the health insurance deductions under the old tax regime.

Here’s how you can claim deductions for payments towards health insurance premiums while filing your Income Tax Return (ITR) for FY 2024-25.

Section 80D of the Income Tax Act provides tax deductions to individuals and Hindu Undivided Families (HUFs) for premiums paid on health insurance policies. This applies to health insurance plans bought for self, spouse, dependent children and parents.

Companies, trusts and partnership firms are not eligible to claim deductions under this section. Also, only non-cash payments are considered valid. Payments made in cash will not qualify for deductions.

Here is a breakdown of the maximum deductions allowed under Section 80D:

• For self, spouse and dependent children: Up to Rs 25,000 per year

• For parents below 60 years: An additional Rs 25,000

• For senior citizen parents (aged 60 or above): Up to Rs 50,000

• If both the taxpayer and parents are above 60: The total deduction can go up to Rs 1 lakh

• In addition, if you pay for preventive health check-ups, you can claim an additional amount up to Rs 5,000 per financial year within the overall limit.

To claim the Section 80D deductions, here are the key factors to keep in mind:  

• The health insurance premium should be paid in any mode other than cash.

• Payments for health insurance premiums during the financial year for which you are filing the ITR will be taken into account.

• Premium payment receipts should be submitted as proof during ITR filing.

Claiming a deduction under Section 80D is easy. Taxpayers must retain and submit valid proof of payment for health insurance premiums and preventive health check-ups. These deductions help reduce the overall taxable income for individuals, families and HUFs.

You can claim the deduction in two ways. One is by submitting the relevant receipts, such as premium payment slips and medical bills, to your employer for tax calculation. You can also claim the deductions by directly providing the documents while filing your ITR.

Beyond tax savings, buying health insurance is a smart financial move for risk coverage. With rising healthcare costs, a good insurance policy offers not just peace of mind but also a legitimate way to reduce your taxable income. Whether you're salaried or self-employed, these deductions can help you save significantly each year.

Claiming health insurance deductions under Section 80D is easy but requires attention to detail. Always cross-check your premium receipts, ensure correct categorisation and file under the correct regime.