Health Insurance | The government may increase the tax benefits on health insurance in Budget 2025-2026. Finance Minister Nirmala Sitharaman may announce this in the budget to be presented on February 1. Representatives of the insurance industry have informed Finance Minister Nirmala Sitharaman about their demands. They have told the government that the deduction on health insurance schemes is currently very low. As a result, taxpayers do not get full deduction on premiums while buying health policies. Representatives of the insurance industry have requested Finance Minister Nirmala Sitharaman to increase tax deduction on health insurance.
Deduction on health policy premium is available under section 80D of the Income Tax Act. However, this deduction is available only under the old income tax regime. This reduces the taxpayer’s taxes. Many taxpayers are interested in buying health policies for tax benefits. In the last few years, general insurance companies have made health policies very expensive. There has been a significant increase in health policy premiums, especially after the Kovid epidemic. Due to this, the common man cannot buy a health policy even if he wants to. On the other hand, deduction cannot be claimed on the entire premium amount of the health policy.
Under Section 80D, individuals below the age of 60 can get a maximum deduction of Rs 25,000 on health policy premiums. Taxpayers aged 60 years and above are eligible for a maximum deduction of Rs 50,000 on health policy premiums. Tax experts say that the government should increase the deduction limit to Rs 50,000 for people below 60 years of age. For those above 60 years of age, the deduction should be increased to Rs 1 lakh.
It is also being demanded that the government should exempt health policy premiums from GST. Currently, 18% GST is levied on health policy premiums. This makes health policies more expensive. There has been a demand to reduce GST on health policies for a long time. But the government has not paid attention to it yet. Experts say that if the government wants to bring everyone under the ambit of health and life insurance by 2047, then it will have to reduce the GST on the premium.
