Health exigency isn’t a new- fangled word in your life. These medical contingencies can make your life miserable if you aren’t well- equipped to deal with them. Then comes health insurance which won’t only help you to manage with medical extremities but also makes you eligible for income tax deductions. Under the Income Tax Act, 1961( 80D), you can enjoy the benefits of tax deductions for health insurance plans that you paid for yourself, your partner, dependents, children, and also parents.
Let’s elaborate on what’s section 80D and how health insurance helps you to save tax.
This quantum will be abated from your taxable income, If you’re paying medical insurance premiums for yourself and your family members. There will be no deduction from your overall outstanding tax quantum. The health insurance income tax benefits under section 80D will also be calculated grounded on the age of the insured person. Section 80 D of the Income Tax Act works in three ways.
Health insurance deduction in income tax
- By paying health insurance premiums for yourself, your partner, and your dependent children, you may save upto Rs. 25, 000 under section 80D of the Income Tax Act. For parents who are below age 60, you’ll get additional tax deduction of INR 25,000. In this way, your total deduction will be INR 50,000.
- But if your parents are elderly citizens i.e. above 60 years, also your deduction quantum will be INR 50,000. So, you can submit a claim for a total deduction of INR 75,000. From this quantum, INR 25,000 will be the premiums that you paid for yourself, your partner and your dependent children and INR 50,000 on the premiums you submitted for your elderly parents.
- But if both you( as the taxpayer) and your parents are over 60 years, you’ll be eligible for the maximum deduction under this section. Your tax deduction quantum could be INR 1 lakh.
These are the tax benefits that you’ll get with your health insurance policies.
With health check- ups, you’ll be eligible for further fresh benefits
Section 80 D of the Income Tax Act is also salutary in saving your tax for health checks. Early health check- ups are necessary to help and diagnose various conditions at the initial stage. Regular health check- ups will also inspire you to stay wholesome and cover you from varied life conditions. Numerous health insurers offer their policyholders with manifold health check- up packages. The most interesting fact is that preventative health check- up also inspires you to get a deduction of Rs 5,000 from your income tax liability.
If your per annum premium against health insurance plans is INR 25,000 and you have chosen health checks for yourself, your parents. You get the benefit of total INR 30,000 as tax rebate. Section 80D of the Income Tax Act offers this fresh benefit so that you can prudently manage your health insurance and enjoy the maximum tax benefits.
Income Duty benefits for indemnity-based plans
Indemnity- grounded health insurance plans also offer income tax benefits to policyholders.
The Indian health insurance sector is swamped with two popular plans and they’re indemnity-based plans and defined benefit plans. An indemnity health insurance plan only compensates for the factual expenditures of the ensured policyholder in case of any hospitalization( up to the pre-decided limit). The reimbursement amount depends on the sum assured for the said policy. An insurance company will pay up to the sum assured as a claim to the policyholder as per the policy terms and conditions.
On the other hand, defined benefit health insurance plans offer the most fiscal protection against critical conditions ( predefined events). He or she will receive the entire sum assured from the insurance provider, If an insured policyholder is linked with any of the mentioned critical conditions. The Section 80D benefits are eligible for both these plans.
You’ll be eligible for income tax deductions under Section 80 D irrespective of whether you’re paying premiums for an indemnity-based plan or a defined benefit plan. Depending on your conditions, you can opt any type of insurance plan and get the benefits
Read More: Health Insurance
Effects to consider when opting a health insurance policy
- Go through the claim settlement ratio of the insurance company
- Check the network hospitals where you’ll get a cashless treatment
- Easy online purchase and renewal procedure
- Strong customer support team for a hassle-free claim agreement process
- 24X7 support
These days, everyone should consider buying a health insurance policy as these programs won’t only cover your health extremities but also help you to get income tax benefits against your plans. PayBima is a reputed online platform where you’ll get numerous health insurance plans from various insurers. Go through the plans and choose the most suitable one for you prudently.