Can Spouses Split Health Insurance Premium to Claim Tax Benefit Under Section 80D?

Today, with the ever increasing price of healthcare in India, it is imperative that we all have a health insurance policy for ourselves and our loved ones. A lot of people today prefer to choose a family floater health insurance plan which covers the cost of health insurance for them, their spouse, parents and children. In case you are someone who is also planning to buy a family floater health insurance where you want to cover your spouse, you must read on!

With the financial burdens that are there due to evolving lifestyle and diseases related to them, healthcare costs associated with them are also on the rise. Keeping this in mind, today health insurers have also updated their way of premium payment. Now, you have the option to split the bill of your health insurance premium between the spouses. This split also then helps both the partners to claim for tax benefit under section 80D. Let’s learn more about the same in this article.

Tax Benefits For Aged Parents

In case the policyholder has aged parents and they are listed as part of the policyholder’s family floater plan, then the insured can avail the claim on tax depending on the annual premium price. You can avail a tax deduction of INR 25000 to 30000 by claiming insurance for your parents. INR 30000 can be availed in case the parents of the policyholder are above 60 years of age. Additionally, if the policyholder’s parents are above the age of 80 years (senior citizens), then the policyholder can avail an annual tax deduction of INR 60000.

Tax Benefits For Senior Citizens

Under Section 80D of the Income Tax Act of 1961, you can avail an annual tax benefit of INR 5000 if you are a senior citizen (aged above 60 years). In case you do not claim your medical insurance under a given time frame (usually one policy year), then you also are liable to get additional benefits under the same. If you are a child of a senior citizen parent who is paying for their parent’s health insurance premium, you are eligible to get a tax benefit under Section 80D as well. Note that the maximum tax deductions per financial year is of Rupees 25000. This amount reaches to Rupees 50000 if the age of the insured individual is over 60 years.

Eligibility Criteria To Avail Tax Benefits 

If you are an individual or a Hindu Undivided Family (HUF), you are eligible to claim a tax benefit under Section 80D when:

1. Payment of health insurance premium in modes other than cash mode:

• Up to INR 25000 which is paid for yourself, spouse, dependent parents or children
• Up to INR 50000 if your parents or you are a senior citizen above the age of 60 years

2. Payment for preventive health check ups (in this case cash payment is allowed):

• Up to INR 50000 for yourself, spouse, dependent child/ children or dependent parents

3. Medical Expenses:
- Senior citizens with age of 60 years or more can claim the deduction of up to INR 50000 on medical expenses incurred even if they do not have a health insurance

4. Contribution towards CGHS or other notified schemes:

• A tax deduction of up to INR 25000 can be made as claim for any contribution made to the Central Government Health Scheme (CGHS) or any similar notified schemes. 
• Note that any contribution made for parents under this scheme is not eligible for tax benefit.

Tax Benefits of Spitting Premium With Spouse

If you want to, you and your spouse can split the tax benefits and make claims under Section 80D for health insurance premium of a family floater plan. This applies to a family floater plan where you, your spouse, dependent children and parents are covered. The benefit of splitting this claim is such that if both the partners or spouses are below the age of 60 years then each one can make a claim of up to INR 25000 of deductible amount for the premium paid. In case either or both the partners are above the age of 60 years (senior citizens), then they can claim INR 25000.

Frequently Asked Questions (FAQs)

Ques 1. What are the exclusions under Section 80D?

Ans. You cannot make a claim under Section 80D for health insurance if you have made your health insurance payment by cash, if payment done is on behalf of adult working children, siblings, grandparents or other relatives. Additionally, you can’t make a claim under Section 80D if you are having a group insurance that’s paid by your organisation on your behalf.

Ques 2. Who is eligible for a tax deduction under section 80D of Income Tax Act,1961?

Ans. Any individual person or members of the Hindu Undivided Family (HUF) are eligible for making a claim from their taxable income under Section 80D of The Income Tax Act of 1961.

This claim can be made for health insurance premium, any health or preventive check up costs for self, spouse, or dependent parents or children. Please do go through the terms and conditions mentioned in Section 80D of the Income Tax Act of 1961 for accuracy of details.

Ques 3. What investment comes under section 80D?

Ans. Under Section 80D of the Income Tax Act of 1961, premiums paid for health insurance or cost for any preventive health check ups can be claimed.

Ques 4. Is claiming tax benefits under section 80D compulsory?

Ans. No, it is not necessary to claim for tax benefit under Section 80D of the Income Tax Act of 1961. However, if you have a health insurance plan or have made healthcare expenses for any preventive healthcare, you can make a claim under section 80D.

Ques 5. Which document is needed for preventive health check-up tax deduction under Section 80D?

Ans. Salaried individuals should submit their health check up invoices to their employer while making their investment declaration. In case you are self employed, the income tax department does not require you to submit any specific document or receipt for making a claim. However, it is advisable to retain the proof of payment or a receipt of insurance premium for future reference.