Q1. Are medical expenses exempt from income tax?

Ans: Yes, you can claim deductions on specific expenses like medical insurance premiums, preventive health check-up, treatment of disabled dependents, etc., under different sections of the Income Tax Act, 1961.

Q2. What is the deduction limit for medical insurance premiums?

Ans: Under Section 80D, you can claim a tax deduction of up to â¹25,000 per financial year for medical insurance premiums if you are below 60 years of age. In the case of senior citizens, the limit increases to â¹50,000.

Q3. Can I claim a deduction under Section 80DD without proof?

Ans: No, you need to provide a medical certificate issued by a certified medical board to claim a deduction under Section 80DD.

How You Can Save Taxes with Medical Expenses

What is Section 80D of Income Tax Act, 1961?

Section 80D of the Income Tax Act, 1961, provide tax deductions on premiums paid for health insurance policies. This deduction is available to individuals and Hindu Undivided Families (HUFs) to encourage them to secure their health and well-being.

Under this section, an individual can claim a deduction of up to ₹25,000 per financial year for premiums paid for themselves, spouse, and dependent children. This limit increases up to ₹50,000 if the insured individual is a senior citizen (60 years or older).

Deductions Allowed Under Section 80D

The expenses that are allowed as deduction u/s 80D involve:

Premiums paid for health insurance covering self, spouse, dependent children, and parents
Expenses incurred for preventive health check-ups
Medical costs for senior citizens who do not have a mediclaim insurance policy
Contributions to government-approved health insurance schemes.

Ways to Use Medical Bills for Tax Exemption

Here are the different ways how medical expenses can help you save tax:

Health Insurance for Yourself & Your Family

Health insurance premiums are a significant way to save on taxes. Under Section 80D of the Income Tax Act, you can claim tax benefit for premiums paid for yourself, your spouse, children, and dependent parents. Here is the breakdown of how much you can save in different scenarios:

Scenario 1: If you buy health insurance for yourself (below 60 years), you are entitled for a tax exemption of up to ₹25,000.

Scenario 2: If you are purchasing a mediclaim policy for self, spouse & children and parents below 60 years of age, you can avail a total tax benefit of ₹50,000. (₹25,000+₹25,000). Please note that if your parents are below the age of 60 years, they will not come under the category of senior citizens. So, for their health insurance, the tax exemption limit would be ₹25,000 only.

Scenario 3: If you are paying health insurance premium for yourself, spouse and children and parents above 60 years of age, then you can claim tax deduction of up to ₹75,000 (₹25,000+₹50,000) on the premium paid.

Scenario 4: If premium paid for self & spouse (with eldest member above 60 years) and parents (above 60 years), you will be eligible for a tax deduction of up to ₹1,00,000 (₹50,000+₹50,000).
Preventive Health Check-ups

To encourage proactive health management, the Government introduced a deduction for preventive health check-ups under Section 80D of IT Act. These check-ups help detect health issues early and reduce risk factors through regular monitoring. You can claim a deduction of up to ₹5,000 for preventive health check-ups for any member of your family.

Notably, this deduction is part of the overall limit of ₹25,000 or ₹50,000, depending on the taxpayer's age and category.
Treatment of a Disabled Dependent

Section 80DD of the Income Tax Act allows individuals to claim a tax deduction of up to ₹75,000 per financial year for medical expenses related to the treatment of a dependent with a disability. If the disability is severe (80% or more), the deduction limit increases to ₹1,25,000 per financial year. Dependents eligible for this deduction can include a spouse, children, parents, or siblings.

To claim this tax benefit, a medical disability certificate issued by the medical board of the central or state government must be submitted at the time of filing income tax returns.
Treatment of Dependent with Specified Diseases

According to Section 80DDB of the Income Tax Act, 1961, individuals are eligible to claim a tax deduction of up to ₹40,000 per financial year on medical expenses incurred on treatment of dependents with specified diseases (beyond 40% disability) such as AIDS, Cancer, Thalassemia, Kidney Failure or Neurological syndromes. However, in the case of senior citizens, the tax deduction limit for medical expenses under this section increases to ₹1 lakh per financial year.

To claim tax deduction, proof of treatment for a specified disease must be submitted when filing income tax returns.

FAQs

Q1. Are medical expenses exempt from income tax?

Ans: Yes, you can claim deductions on specific expenses like medical insurance premiums, preventive health check-up, treatment of disabled dependents, etc., under different sections of the Income Tax Act, 1961.
Q2. What is the deduction limit for medical insurance premiums?

Ans: Under Section 80D, you can claim a tax deduction of up to ₹25,000 per financial year for medical insurance premiums if you are below 60 years of age. In the case of senior citizens, the limit increases to ₹50,000.
Q3. Can I claim a deduction under Section 80DD without proof?

Ans: No, you need to provide a medical certificate issued by a certified medical board to claim a deduction under Section 80DD.

Health insurance companies

View more insurers

Disclaimer: The list mentioned is according to the alphabetical order of the insurance companies. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. For complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website www.irdai.gov.in

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*All the health insurance plans cover hospitalization expenses including COVID-19 treatment cover up to the specified limits. You can also buy specific COVID-19 health insurance policies such as Corona Kavach Policy and Corona Rakshak policy.

**All savings and online discounts are provided by insurers as per IRDAI approved insurance plans. #Tax Benefits are subject to changes in tax laws. GST Exemptions depend on fulfilment of qualification criteria and submission of relevant documents.

*₹1748/month is the starting price for a 1 crore health insurance for an 18-year-old male, with no pre-existing diseases. Discount on renewal premium is subject to the number of wellness points earned in the health insurance policy. For more details about the plans, please read the sale brochure carefully to get upto 100% discount on renewal premium.

*₹400/month is the starting price for ₹ 5 lakh Health insurance for a 30 year old male & 29 years old female, living in Delhi with no pre-existing diseases

*₹541/month is the starting price for ₹ 10 lakh Health insurance for a 30 year old male & 29 years old female, living in Delhi with no pre-existing diseases

*₹762/month is the starting price for ₹ 1 Crore Health insurance for a 30 year old male & 29 years old female, living in Delhi with no pre-existing diseases

*₹243/month(₹ 8/day) is the starting price for a 5 lakh health insurance for a 20-year-old male, non-smoker, living in Bengaluru with no pre-existing diseases

*₹2020/month is the starting price for ₹ 1 Cr Health insurance for a 50 year old male & 50 years old female, living in Bangalore with no pre-existing diseases rounded off to nearest 10.

*₹390/month (₹13 per day) is starting price for 1 cr. Health insurance for 25 years old male, with pre-existing diseases, residing from tier 1 city rounded off to the nearest 10.

*No medical tests are required unless requested by the insurer’s underwriter. In-case of pre-existing diseases relevant medical proof would be required as per the terms and condition of the policy opted.

*The values taken for effective cost calculation are indicative values and may change as per the selected plan.

*Coverage upto double the amount of Sum Insured is available on certain covers for a minimum plan of Rs. 5 Lakh on the first claim only to an individual of upto 45 years of age with no pre-existing diseases. The benefit is available with or without extra cost depending on the plan chosen.

*Coverage of pre-existing diseases is provided by insurer as per their underwriting policy.

*The scope of coverage may vary from plan to plan.

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Tax Benefits are subject to changes in tax laws. GST Exemption depends on fulfilment of qualification criteria and submission of relevant documents as required by the insurers. For more details on risk factors, terms and conditions, please read the sales brochure and applicable rules and regulation carefully before concluding a sale.

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How You Can Save Taxes with Medical Expenses?

What is Section 80D of Income Tax Act, 1961?

Deductions Allowed Under Section 80D

Ways to Use Medical Bills for Tax Exemption

Health Insurance for Yourself & Your Family

Preventive Health Check-ups

Treatment of a Disabled Dependent

Treatment of Dependent with Specified Diseases