A friend in need is a friend indeed; this phrase suits best to health insurance. Where medical inflation is rising, and treatment costs are skyrocketing, a sound health insurance policy provides you and your family a comprehensive medical coverage and supports you in your tough time. It bears your medical expenses and avail the best possible treatment. Its benefits do not limit here, along with the right treatment, financial security; you are entitled to get tax deductions on it under section 80 D of the Income Tax Act. This is why investing in good health insurance offers you double bonanza. In this article, you can read how you can avail health insurance tax benefits.
Tax Benefit on Premium
Premium is the amount that you have to pay against the sum insured. Under Section 80 D of the Income Tax Act, the premium paid for the health insurance policy for self and your dependent parents, spouse, and children is exempt from tax. You can claim Rs.25000 for individual and Rs.25000 for senior citizen in case if you and your parents are below 60 years of age.
But, if you are below 60 and your parents are above 60, then you can get the exemption of Rs. 25000 +Rs. 50000. Also, if you and your parents are above 60 years, then you can get the exemption of Rs. 100000.
Tax Reduction on Preventive Health Check Up
Under your health insurance policy, you are entitled for tax exemption for preventive health check-up, if you need to get more tests done, then the prescribed limit. According to Section 80 D, if you and your parents are below 60 years then the limit is up to Rs.5000 but if you and your parents are above 60 years of age, then you can avail tax reduction on annual health checkups up to Rs.7000.
Other Tax Benefits
Premium paid against health insurance for very senior citizens like 80 years, treatment of specified illnesses, and treatment of a dependent with a disability, are all come under tax deduction according to the terms and conditions. This reduces your taxable income low that reflects less tax liability.
Things to Be Noted Before Filing for Tax Return
- For tax return, it’s necessary to make the payment of the premium through net banking, cards, online, or other payment gateway. Any payment in cash not accepted for tax deduction.
- Premium paid for siblings, grandparents, paternal, and maternal relatives cannot be claimed under the tax deduction act.
- Premium paid by parents on behalf of working children cannot consider for tax benefit.
- Group health insurance premium paid by the company on behalf of the employees covered under group is not eligible for deduction.
- Government also encourages people to opt for medical insurance to get tax deductions.
The continuous rise in pollution, unhealthy lifestyle, junk food, and lack of physical activity are causing chronic diseases. This increasing medical cost can eat all your hard-earned savings. Therefore, health insurance has become the need of an hour. It not only helps you in financial crunch but also save your tax. You can consider the health insurance plans offered by Care Health Insurance (Formerly Religare Health Insurance) to enjoy a host of tax benefits while ensuring the coverage of your medical emergency.