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Preventive Health Check-Ups and Tax Deductions

Published On Jan 03, 2021, Updated On Jan 07, 2021

A policyholder can avail tax benefits on the payment of premium towards the health insurance plan. With the rise in the procedures for preventive healthcare, the government has permitted tax relief on these activities as well. The premium paid by a policyholder towards health insurance for self and other family members( including spouse, dependent children and parents) not just provides financial assistance during medical emergencies, it also brings down the tax liability on the shoulder of the taxpayer.

Buying enough health insurance coverage is a significant step in ensuring good financial planning. Therefore, prior to the person starting to save, they should get themselves and their family members insured properly with a health insurance plan.

Meaning of Preventive Healthcare

Steps and medicines taken in order to prevent an illness is known as preventive healthcare. Several methods are used for preventing disease. Adults and children are suggested to go for timely health check-ups for screening the disease and knowing the risk factors, in case any exists. Some illnesses or diseases that require regular screening are HIV, depression, syphilis, gonorrhoea, etc.

Tax Benefits on Preventive Health Check-Ups

Tax deduction on preventive health check-ups was introduced from 2013-14( assessment year). In order to claim the tax deductions, the following conditions must be fulfilled:

  • The expenses on preventive health check ups should be incurred in a specific financial year. In order to qualify for the tax deduction, the preventive health check up should be done for self, spouse and dependent children only (no prescribed limit is mentioned on the number of children). However, no tax deductions are available on premium paid towards health insurance for sister, brother, in-laws and children, who are not dependent on you financially.
  • Tax deductions are eligible both on premium payment made in cash or any other mode
  • If the afore-mentioned conditions are fulfilled, the sum eligible for tax deductions is the actual amount spent in a year or Rs 5,000, whichever is less. The amount Rs 5,000 is included in the overall Rs. 25,000 for premium paid towards health insurance. As it happens in health insurance for senior citizens, there is no additional tax exemption offered even if an individual above 60 years of age undergoes the health check-up.

Preventive Health Check-Ups and Tax Deductions

Things to Remember About Tax Deduction on Preventive Health Check-ups

You should remember the following things regarding tax deduction on preventive health check-ups:

  • The types of tests, laboratories that qualify etc for the tax deductions are not mentioned. Therefore, expenditure incurred towards preventive health check ups as recognized generally would safely qualify for tax exemption.
  • Although, it is not required to submit any document/receipt to the tax department, however, it is highly recommended to retain the payment receipt in the tax file.
  • Cash receipts are accepted for tax deductions under preventive health check-ups.

Final Words

With the urban lifestyle and hectic schedules, there is a rise in diseases such as heart diseases and diabetes. Such diseases are now no longer limited just to the age factor but can happen to anyone at any time today. Therefore, besides having proper health insurance, it is significant to get preventive health check-ups regularly in order to avoid any unwanted shocks due to your health. Therefore, in order to promote activities such as preventive health checks-ups for the wellbeing of people, the government has done a great thing by introducing tax benefits on preventive health check-ups.

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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