Rebate u/s 80d- medical insurance premium

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 January 2012 AN INDIVIDUAL HAS TAKEN A POLICY FOR 5 YEARS PAYING PREMIUM OF 1 LAC RUPEES ON MEDICAL INSURANCE.
HE HAS PAID PREMIUM BY TAKING A LOAN TO BE PAID IN NEXT 5 YEARS I.E SAY 2011 TO 2016.

CAN YOU PLEASE CLARIFY WHETHER HE IS ELIGIBLE FOR REBATE @ 15000/- PER YEAR FROM 2011 TO 2016 FOR NEXT 5 YEARS OR HE IS ELIGIBLE FOR ONE YEAR REBATE OF RS 15000/- ONLY.

KINDLY HELP IN CLARIFYING

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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25 January 2012 Deduction will be available only the year of payment.coming year premium paid in advance will be counted as current year only. Deduction will be available on payment basis only.

Querist : Anonymous

Querist : Anonymous (Querist)

27 January 2012 Insurance Premium should be paid out of Taxable income.

Here the issue is the Premium paid in advance through Loan.

However the loan repayment is through taxable income of the relevent years.

this is the issue.

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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20 July 2025 Key Points:
Deduction is Allowed Only in the Year of Actual Payment
The tax benefit under Section 80D is available only for the premiums actually paid during the financial year.
If you pay the premium in advance (for multiple years), only the amount paid in that particular year is eligible for deduction in that year.
Payment Through Loan Does Not Change Deduction Year
Even if you take a loan to pay the premium upfront, the deduction is claimed only in the year when the premium is paid to the insurer, not when you repay the loan.
The subsequent repayment of the loan from your taxable income in future years does not qualify for any further deduction under Section 80D.
Taxable Income and Source of Payment
The premium should be paid out of your taxable income (which usually is the case).
Taking a loan to pay the premium upfront does not grant multiple years’ deduction; it’s the payment to the insurer that counts, not the repayment of loan.
Conclusion:
If you paid Rs. 1 lakh as premium for 5 years in 2011 by taking a loan, you can claim the deduction only for the full Rs. 1 lakh in 2011, not Rs. 15,000 each year for the next five years.
Loan repayments in subsequent years don’t get any deduction under Section 80D.

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