Insurance for Tax Filing India 2026

Quick Answer

When filing ITR: declare health insurance premium under 80D (Schedule VIA), life insurance premium under 80C (Schedule VIA), and any taxable insurance proceeds under "Income from Other Sources." Keep premium payment proofs (receipts, bank statements) for 8 years. Under new tax regime, skip 80C/80D — they are not available.

TL;DR Summary:

Who Should Choose Old Regime (Declare 80C/80D)?

Old Regime (Declare 80C/80D) is suitable if your priorities align with its strengths. Review the comparison table above and match with your needs.

Who Should Avoid Old Regime (Declare 80C/80D)?

Avoid Old Regime (Declare 80C/80D) if: your priorities are better served by New Regime (No Deductions), you find the premium unaffordable, or your specific requirements (coverage, network, riders) are not met.

Who Should Choose New Regime (No Deductions)?

New Regime (No Deductions) is suitable if your priorities align with its strengths. Review the comparison table above and match with your needs.

Who Should Avoid New Regime (No Deductions)?

Avoid New Regime (No Deductions) if: your priorities are better served by Old Regime (Declare 80C/80D), you need features that New Regime (No Deductions) doesn't offer, or the coverage is insufficient for your needs.

Benefits

Old Regime (Declare 80C/80D) Benefits

• Schedule VIA → Section 80D
• Schedule VIA → Section 80C
• Not declared (exempt)

New Regime (No Deductions) Benefits

• Premium receipt + bank statement
• Premium receipt + policy schedule
• Policy document (for records)

Limitations

Old Regime (Declare 80C/80D) Limitations

• Schedule OS → Income from Other Sources
• Schedule CG → Capital Gains

New Regime (No Deductions) Limitations

• Maturity receipt + policy document
• ULIP statement

Eligibility

Coverage

Coverage details vary by plan and insurer. Key coverage aspects:

• 80D (health insurance): Old Regime (Declare 80C/80D) = Schedule VIA → Section 80D, New Regime (No Deductions) = Premium receipt + bank statement
• 80C (life insurance): Old Regime (Declare 80C/80D) = Schedule VIA → Section 80C, New Regime (No Deductions) = Premium receipt + policy schedule

Important: Coverage details change frequently. Always verify the latest policy wording on the insurer's website before purchase.

Exclusions

Standard exclusions (varies by product):

• Fraud or misrepresentation
• Pre-existing conditions (during waiting period, where applicable)
• Self-inflicted injuries
• War, nuclear events, terrorism
• Illegal activities

Product-specific exclusions vary. Read the policy wording carefully.

Premium Factors

Premium depends on:

• Age (higher = higher premium)
• Sum insured / coverage amount
• City / location
• Add-ons and riders
• Co-payment (if applicable)
• Policy tenure
• Health/lifestyle factors (smoking, pre-existing conditions)

Tax Benefits

New tax regime (FY 2025-26 default): 80C and 80D are NOT available. Only old regime allows these deductions.

Claim Process

Standard Claim Process

1. Inform insurer within 48 hours (varies by product)
2. Submit claim form with required documents
3. Insurer verifies documents and circumstances
4. Approval/rejection within 7-30 days (varies by product and complexity)
5. Payout within 7-15 working days of approval

Documents Required

• Claim form (insurer-provided)
• Policy document
• ID proof (Aadhaar/PAN)
• Medical reports / FIR / discharge summary (as applicable)
• Bank account details (for payout)

Real Indian Example

Raj filed ITR-2 for FY 2025-26. Old regime: declared ₹35,000 health insurance (80D — self + parents) and ₹18,000 life insurance (80C). Saved ₹16,380 in tax (30% slab). Kept premium receipts + bank statements as proof. His colleague Priya chose new regime — she did not declare any insurance deductions (not available) but paid lower tax due to wider slabs.

Common Mistakes

1. Choosing based on premium alone — lower premium may mean lower coverage or higher deductibles
2. Not reading exclusions — assuming everything is covered
3. Under-declaring information — non-disclosure can lead to claim rejection
4. Not comparing options — buying from the first insurer you encounter
5. Ignoring claim settlement record — cheap premium from a low-CSR insurer means claim struggle

Pros & Cons

Old Regime (Declare 80C/80D) — Pros

• Schedule VIA → Section 80D
• Schedule VIA → Section 80C
• Not declared (exempt)

Old Regime (Declare 80C/80D) — Cons

• Schedule OS → Income from Other Sources
• May not suit all profiles

New Regime (No Deductions) — Pros

• Premium receipt + bank statement
• Premium receipt + policy schedule
• Policy document (for records)

New Regime (No Deductions) — Cons

• Maturity receipt + policy document
• May not suit all profiles

Decision Framework

Checklist

Before making a decision:

• [ ] Compare premium quotes from 3+ insurers
• [ ] Verify CSR from IRDAI Annual Report
• [ ] Read policy wording — especially exclusions
• [ ] Check network coverage (hospitals/garages) in your city
• [ ] Verify waiting periods (health/life products)
• [ ] Understand tax implications (old vs new regime)
• [ ] Consult an IRDAI-certified advisor if unsure

Original Insight from Paliwal Secure

The most common ITR mistake: declaring 80D/80C when filing under the new tax regime. The new regime does NOT allow these deductions — declaring them will cause an income tax notice (mismatch between your ITR and Form 16). Before filing, confirm which regime your employer used in Form 16. If your employer used the new regime (default), you cannot claim 80C/80D unless you switch to the old regime in your ITR.

FAQ

Q: Do I need to attach insurance premium receipts with ITR?

A: No. ITR filing is paperless (e-filing). However, keep premium receipts, bank statements, and policy documents for 8 years. The Income Tax department may ask for proof during assessment (scrutiny). Digital copies are acceptable.

Q: Can I claim 80D if my employer already deducted TDS?

A: Yes. If your employer did not consider 80D (or you paid premium after submitting investment proof to employer), you can claim it in your ITR. The excess TCS/TDS will be refunded. File ITR with 80D deduction under old regime.

Q: What happens if I declare 80C/80D in the new tax regime?

A: The ITR portal will reject the claim (new regime does not allow 80C/80D). If you manually enter it, the Income Tax department's system will flag a mismatch and send a notice. Always confirm your regime before filing.

Q: Are insurance maturity proceeds taxable?

A: If 10(10D) conditions are met (premium ≤10% SA, SA ≥10× premium): tax-free, no declaration needed. If conditions are NOT met: taxable as "Income from Other Sources" in Schedule OS. ULIP gains (premium >₹2.5L): taxable as Capital Gains in Schedule CG.

Q: Can I switch from new to old regime when filing ITR?

A: Yes, if you are salaried (no business income). You can choose old regime in your ITR even if your employer used the new regime for TDS. Any excess TDS will be refunded. However, once you choose old regime in ITR, you cannot switch back to new for that assessment year.

Related Guides

• Compare Insurance Plans — Side-by-side comparison
• Insurance Glossary — Understand insurance terms
• Claim Settlement Ratio — Why CSR matters
• Insurance FAQ — Common questions answered
• InsureGPT AI — Ask insurance questions 24/7
• Free Policy Audit — Review your existing policy
• Tax Saving Guide — Insurance tax benefits explained

Author Review

As an IRDAI Registered POSP (Code: IP429834) with 500+ families served, I recommend evaluating both options based on your specific needs. Don't choose based on premium alone — compare coverage, claim record, and suitability. Use our comparison tool for instant quotes, or consult me personally on WhatsApp +91-92587-77312.

— Himanshu Paliwal, IRDAI Certified Insurance Advisor

References

• IRDAI Annual Report 2024-25 — Claim Settlement Ratios
• IRDAI Guidelines (applicable to the product type discussed)
• Income Tax Act, 1961 — Sections 80C, 80D, 10(10D) (as amended)
• Insurer websites and policy documents (verify latest before purchase)

Disclaimer

Insurance is the subject matter of solicitation. Information is based on IRDAI guidelines, Income Tax Act provisions, and publicly available data. Premium estimates are indicative and vary by ±15%. Tax benefits are subject to tax laws in force — consult your CA for personalized tax advice. Always read the policy wording before purchase.

Author: Himanshu Paliwal — IRDAI Registered POSP (Code: IP429834) Last updated: January 2026

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