Are Group Health Insurance Premiums Tax Deductible?

Are group health insurances tax deductible? The answer to this question shall be undoubtedly yes. The group health insurance policy which is sponsored by the employers is tax deductible. However, one may find some exceptions to it. In addition, the group health insurance offers tax benefits to both the employers and the employees.

Read more
Personalised health plans that fit your organizations requirements & dedicated experts to help you choose.
Customized plans

Affordable prices

24X7 Support

Dedicated claims manager

Total Care

All round wellness benefits

Fast-track your search with instant quotes from top insurers
₹1 Lakh cover starting at
No medical test required
Zero waiting period
Paperless claims
secure-icon We don't spam
Get Updates on WhatsApp
By clicking on "View Plans Instantly" you agree to our Privacy Policy and Terms Of Use and also provide us a formal mandate to represent you to the insurer and communicate to you the grant of a cover.

Whom do you want to insure?

  • Employee, spouse & kids

  • Employee only

Are Group health insurances tax deductible?

Every employer offers group health insurance policy to their employees to ensure their safety and security against an unforeseeable event. In addition, the tax benefits also encourage the employer to provide such insurance products to their employees.

For small businesses, group health insurance is the key to taking care of the workforce of an organisation. Such types of insurance policies include several kinds of benefits for both the employer and the employees. It is an affordable policy and a quick solution for providing health coverage.

How Are Group Health Insurance Tax Deductibles?

The premium of group health insurance is deductible from the taxable income of the organisation. Section 80D of the Income Tax Act states that the employer paying group health insurance premiums may avail of tax benefits from the taxable income. The individuals may also claim tax benefits of up to INR 25,000 from their taxable income.

Are Group Health Insurances Tax Deductibles for Employers?

The group health insurance premium paid by the employer is deemed to fetch benefits for the organisation. The premium is considered as an expense of business which is shown in the expenditure column in the balance sheet. Therefore, an employer paying group health insurance premiums may fetch tax benefits on the entire amount.

Let us discuss how it works in order to better understand how are group health insurances taxes deductibles.

Salary, perquisite, and profit in lieu of salary come under section 17 of the Income Tax Act of 1969. Section 17 states that the premium paid by the employer is a benefit for the organisation. Such premiums fall under the category of profit in lieu of salary. It means that the firm or company may claim the premium amount as an expense in the balance sheet or profit and loss account.

Section 17 further allows public or private companies, firms, or sole proprietorships to fetch this benefit.

The premium of group health insurance is an additional benefit provided by the companies to their employees. Therefore, the employer may avail of tax benefits and deduct the amount from the taxable income. Hence, the group health insurance benefit helps the company in order to reduce tax liability.

Are Group Health Insurance Tax Deductibles for Employees?

The group health insurance also benefits employees. However, the tax benefits vary depending on many scenarios.

The employees may avail of tax benefits when they pay the entire premium amount. In this scenario, no benefits shall be enjoyed by the employer.

The employees may also avail of tax benefits when they pay they partially pay the premium amount.

Case Study

ABC Limited is a start-up. It starts providing good health insurance benefits to the employees in order to indemnify them against medical expenses. The company decided to bear the premium of group health insurance. Therefore, the company incorporated the premium expense in the profit and loss account and availed of the tax benefits under section 80D of the Income Tax Act.


When an employer or an employee pays the premium of a group health insurance policy, they may avail of tax benefits under section 80D of the Income Tax Act. Employees may claim the tax deduction benefits on their medical bills. While the employer may show the premium in the profit and loss account to claim the tax deduction benefit.

Written By: PolicyBazaar - Updated: 15 September 2023

Wait! Didn't find what you were looking for?

Our certified business insurance experts are just a call away.

Call scheduled successfully

Thank you
Our experts will provide you assistance with your
insurance coverage. Be assured, all your questions
will be answered

Customizable plans from top insurers

starting @ ₹110/employee*

View Quotes
Group Health Insurance Articles
GIPSA stands for General Insurance Public Sector Association.It is a group of four General insurance companies...Read more
28 Apr 2022 by Policybazaar 14496 Views
Employee welfare is one of the prime responsibilities of an employer. It helps in the smooth functioning of the...Read more
29 Nov 2022 by Policybazaar 7463 Views
When it comes to insurance, it's important to have a clear understanding of the available options. GPA (Group...Read more
01 Jun 2023 by Policybazaar 6424 Views
A group medical insurance scheme offers many benefits in addition to providing financial support during medical...Read more
08 Feb 2023 by Policybazaar 6886 Views
Adequate health insurance forms an important component in a sound and practical personal financial plan. Its...Read more
21 Sep 2022 by Policybazaar 6692 Views
In today's fast-paced and competitive world, mental health...Read more
23 Feb 2024 by Policybazaar 11 Views
In today's fast-paced and competitive world, the importance of...Read more
22 Feb 2024 by Policybazaar 9 Views
Group health insurance for high-risk occupations (GHI) plays a...Read more
13 Feb 2024 by Policybazaar 57 Views
Providing health insurance coverage to employees is a gesture of...Read more
08 Feb 2024 by Policybazaar 64 Views
In the corporate sector, the health and happiness of employees...Read more
14 Nov 2023 by Policybazaar 337 Views
Policybazaar for Business - Group Health Insurance - Customer Reviews
View all
Based on 189 reviews
out of 5
Based on 189 reviews
38 users
136 users
15 users
0 users
0 users
3.8 April 09, 2023
Excellent Support
It was easy to buy insurance from PolicyBazaar website and customer support was also amazing to clear all the doubts.Thankyou. Highly worth it.
4.3 April 01, 2023
Necessary Investment
It is a good and necessary investment. Thanks PB.
4.3 March 24, 2023
Provides Satisfactory Results
I purchased Group health insurance at policybazaar recently and i am so much satisfied with the plan. The application process was smooth and efficient, making the typically tedious task of getting insurance surprisingly hassle-free.Thanks PB.
3.8 March 16, 2023
Helpful In Making Decisions
When it came to selcting the right Group Health Insurance, Policybazaar offered an impressive range of options from reputable insurers. I appreciated the comprehensive details avalable for each policy which helped me to take the better decisions. Thankyou.
4.3 March 15, 2023
Increases Clients Expectations
I recently had the pleasure of securing a Group Health Insurance policy throug PolicyBazaar and I must say the Entire process exceeded my expectations! From start to finish, their service werw great. Thankyou.
3.8 March 02, 2023
Great Experience
I got great deals on PolicyBazaar website. Highly recommend.
4.3 February 17, 2023
Excellent Purchase
It was a excellent purchase at PolicyBazaaar. Thankyou team.
4.3 February 04, 2023
Prompt Services
Policybazaar's efficient claims process was impressive. In case of any medical emergencies, my employees were able to get their claims settled swiftly, allowing them to focus on their health and recovery without worrying about financial aspects.Thankyou
4.3 January 22, 2023
Budget Friendly Purchase
Thankyou PolicyBazaar for providing such a great plan at affordable premium rates. It was a budget-freindly purchase.
4.3 January 09, 2023
Multiple Range Of Benefits
I purchased Group health Insurance which offered me plans with affordable rates Thankyou PB.