Which ITR Form applies for Insurance Tax Deductions?

To report income, claim deductions and calculate tax liability, taxpayers need to file ITR. ITR full form stands for Income Tax Return, a form submitted annually to the Income Tax Department and selecting the right ITR form is crucial. 

In this blog, we’ll simplify the process and help you find the right ITR form for your insurance deductions. This will ensure a smoother and more efficient tax filing experience.

Treatment of insurance-related tax deductions in ITR

In your ITR, insurance-related tax deductions, like those under Section 80D, are reported in a specific part of the form called deductions. It allows taxpayers to claim deductions for health insurance premiums paid for themselves, their spouse, dependent children and parents, as well as for preventive health check-ups.

To report these deductions, you must first log into the income tax e-filing portal and access the relevant ITR form. Within the form, navigate to the Gross Total Income section and then proceed to the Tax Deductions area. Here, you will find specific prompts related to health insurance premium payments under Schedule 80D. You are required to input the total amount paid during the financial year for health insurance and preventive health check-ups.

The deductions are integrated into the calculation of your taxable income. This potentially lowers your overall tax liability. It’s crucial to ensure that all premiums are paid through non-cash methods (except for preventive health check-ups, where cash is permissible). Also, retain all receipts and documentation for potential verification by the Income Tax Department. This helps streamline your tax filing and ensures you take full advantage of available tax benefits. 

Relevant ITR forms for claiming insurance-related deductions 

When filing your ITR, it is essential to use the correct ITR form.  Here’s an overview of the relevant ITR forms for individuals seeking to claim these deductions:

ITR-1 (SAHAJ)

ITR-1, also known as SAHAJ, is specifically designed for individual taxpayers who have a straightforward financial scenario. This form is suitable if you are a salaried employee, pensioner or have income from one house property and other sources like interest income. 

ITR-4 (SUGAM)

ITR-4, known as SUGAM, is geared towards individuals, HUFs and partnership firms (excluding LLPs) that opt for a presumptive income scheme under Sections 44AD, 44ADA or 44AE. 

General tips for filing

When claiming deductions in your ITR, keep these key points in mind:

• Check the Deduction Limits

Ensure that you are claiming the correct amount based on eligibility criteria. Misreporting deductions can lead to errors or missed benefits.

• Report Multi-Year Premiums Correctly

If you’ve paid a lump sum for a multi-year policy, check how the deduction should be distributed over the policy term to avoid over- or under-reporting.

• Verify Age-Based Eligibility

Some deductions vary based on age criteria. Ensure that you are entering the correct details to maximise your benefits.

• Keep Documentation Ready

Maintain proof of premium payments, policy details and any receipts related to your claim. These may be required for verification in case of scrutiny by tax authorities.

Note

Choosing the correct ITR form and accurately reporting your income and deductions ensures compliance with tax laws. It also helps maximise your potential tax savings. Always consult the latest guidelines from the Income Tax Department or seek advice from a tax professional to ensure that you are using the most appropriate form for your specific tax situation.

Closing thoughts 

We hope this guide has clarified which ITR forms to use for claiming insurance-related deductions. To ensure accurate tax filing, use the digital tools and calculators on the official Income Tax e-filing portal. They help you understand how to calculate income tax, including deductible amounts and tax liabilities.