Tax Benefits on Health Insurance: Save While You Secure Your Health

10 min read Posted on 16july 2025

The primary benefit of Health insurance in India is its ability to reduce medical expenses and ensure tax reductions. The Income Tax Act allows taxpayers to take substantial deductions when they pay a health insurance premium. It focuses on explaining the tax benefits of health insurance in India, especially under Section 80D deductions and family floater plans, and suggests ways to reduce taxes through insurance to support sound financial planning.

Whether purchasing a policy for the first time or reviewing an existing one, knowing about the health premium tax rebate is important. In the subsequent sections, it is evident how to apply for the 80D income tax benefit and how renewbuy.com assists in locating appropriate policies that promote both health and financial stability.

What is Section 80D of the Income Tax Act?

Section 80D allows for a tax deduction on health insurance premiums paid by individuals and Hindu Undivided Families (HUFs). Unlike Section 80C, this section covers investments such as LIC, EPF, and PPF. 

How to Claim Tax Benefits on Health Insurance Premiums?

• While filing income tax returns, individuals must navigate to the deductions section and select Section 80D deductions.
• They must enter the amount paid as premiums toward eligible health insurance policies.
• To claim the health premium tax rebate, premiums must be paid via non-cash modes such as debit/credit card, net banking, UPI, or cheque. Only preventive health check-ups can be paid for in cash.
• The policy must be in the name of the individual, their spouse, children, or parents to qualify under the Section 80D income tax benefit.
• Essential documents like premium receipts and bank statements should be maintained for records.
• The health premium tax rebate is claimable every financial year in which the premium is paid.

Family Floater Health Plans:

These plans cover the policyholder, their spouse, and dependent children under a single sum insured. Premiums paid can be deducted up to ₹25,000. An additional deduction of ₹25,000 or ₹50,000 (if parents are senior citizens) is claimable if a separate policy for parents is paid.

Parents – Senior Citizens:

Individuals paying premiums for parents over 60 can claim up to ₹50,000 in 80D income tax benefit due to higher medical risks in that age group.

What's Included Under Section 80D?

• Premiums paid for health insurance covering self, spouse, dependent children, and parents.
• Preventive health check-ups up to ₹5,000 (within the overall limit).
• Tax benefits for health insurance in India also apply to premiums paid for top-up or super-top up health insurance policies.
• Payments for critical illness riders attached to base health or life insurance policies are to be eligible under the 80D income tax benefit.

Tax Benefits for HUFs

A Hindu Undivided Family (HUF) is recognised under the Income Tax Act and can claim deductions under Section 80D. If policy is taken in the name of the HUF’s members (such as the karta, spouse, children, or dependents), the health premium tax rebate can be claimed by the HUF. The HUF can claim ₹25,000 or ₹50,000 (for senior citizens) per financial year. This makes HUFs a useful structure for tax savings and comprehensive family health coverage. This will enable HUFs to save tax with insurance and ensure the health of the family members.

Can You Claim Tax Benefits on Multi-Year Health Insurance?

Yes, tax benefits can be claimed on multi-year policies. For instance, if ₹60,000 is paid for a 3-year individual plan, the policyholder can claim ₹20,000 annually under Section 80D tax benefit.

How RenewBuy Helps Maximise Your 80D Tax Benefits?

RenewBuy makes the process of selecting the appropriate insurance policy clear-cut and directed towards benefits and tax savings. Here is the way it assists:

1. Tax-Optimised Policy Filters    RenewBuy highlights plans eligible for 80D deductions, helping users choose policies offering both coverage and the 80D tax benefit.
2. Family Floater Insights    The RenewBuy system outlines how premium payments impact deductions for different family members, including parents and children.

Tips to Maximise Your Tax Benefits

• Add Parents    Purchasing policies for one’s parents, particularly elderly individuals, enable the allowance of more deductions.
• Choose Preventive Check-Ups    The deduction’s portion that is not missed can be avoided by offering preventive health check-up services for a maximum of 5,000 annually.
• Top-Up Plans    The health premium tax rebate can be claimed through top-up and super top-up plans, improving overall insurance coverage.
• Floater and Individual Plans    Combining the risk and tax savings of both plans allows for a more comprehensive approach while providing coverage for each family member. 

RenewBuy: A Tax-Planning & Health-Securing Ally

RenewBuy is more than just a standard insurance comparison site. It acts as a mediator in making prudent financial choices. RenewBuy enables users to save tax with insurance by highlighting 80D deductions, displaying premium splits among family members, and aiding in identifying the highest eligible tax benefits.

• Transparent plan comparisons.
• Tax-eligibility filters.
• Auto-generated records for tax filing.
• Access to expert insurance and tax advice.

Conclusion: Secure Health, Save Tax

In India, health insurance is necessary for medical reasons and enables tax savings through strategic means. Individuals can benefit from the 80D income tax benefit by minimising their current tax obligations and saving for the future.

Individuals can obtain both top-notch coverage and financial efficiency by recognising the tax benefits of health insurance in India, selecting the appropriate policies, and employing RenewBuy resources and advice.

• Key takeaways: Are individuals who have paid premiums for their siblings or in-laws eligible to claim Section 80D benefits?
• Only if they legally pay premiums through digital/electronic channels.
• Add older individuals to the plan to increase deductions.
• Utilise preventive health check-up benefits.
• Check comparative rate eligibility with platforms such as RenewBuy.org

Disclaimer: The content published in this article is intended solely for the readers' informational purposes and should not be relied upon for personal, medical, legal, or financial decisions. It is advisable to seek advice from a qualified professional regarding specific concerns. The details provided regarding the plan are for reference purposes only. Please visit the insurer’s website for the latest updates on the plan. The company does not guarantee suitability, reliability, timeliness, or accuracy of the information, services, or any other aspects mentioned in this regard for any purpose. We do not endorse any insurance company or insurance product provided by any insurer.