How to Avail Medical Insurance Tax Benefit?
Read here how you can avail of medical insurance tax benefits under a health insurance policy:
Tax Deduction on Health Insurance Premium
Health insurance premium refers to the sum of money you have to pay to the insurance company to get the coverage under a mediclaim policy. Section 80D of the Income Tax Act allows you to get a tax deduction of up to Rs 25,000 per year for any individual and family health insurance policy covering self, spouse, and children. Senior citizens can get a deduction up to a maximum of Rs 50,000 per year.
Example:
Rohit (aged 40 years) opted for a health insurance plan covering himself, his wife (36 years), and 8-year old child. He pays an annual premium of Rs 25,850. He also pays a health insurance premium of Rs 45,000 for the mediclaim policy covering his elderly father (67 years) and mother (62 years).
- The deduction Rohit is eligible for the health insurance policy covering self, spouse, and child is up to Rs 25,000.
- The maximum deduction he is eligible to get for the mediclaim for parents is up to Rs 75,000.
In this way, he becomes eligible for the total deduction under Section 80D up to Rs.70,000 for a year.
Tax Benefit on Preventive Health Check-Up
Preventive health check-up expenses up to Rs. 5,000 are eligible for Section 80D tax exemption. For instance, Ram has paid Rs. 23,000 as the premium for his mediclaim and also spent Rs. 5,000 for his health check-ups. As per the policy, he is eligible for tax exemptions of Rs. 23,000 for the premium paid and Rs.2,000 for a health check-up; the total is Rs. 25,000. It is so because, under section 80D of the Income Tax Act, the maximum claim cannot exceed Rs. 25,000.
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