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Tax benefits of Health Insurance
Health insurance just like life insurance is an imperative financial tool. Purchasing health insurance is exactly like a buy 1 get 1 bonus offer. You get both financial security from a medical emergency and tax benefits too. The tax benefits of health insurance act like a cherry on the cake that can help you reduce your annual income tax liability and save you money.
Let us explore more to get a better understanding of the tax benefits.
How much tax benefit can you get on health insurance?
The tax benefits of health insurance are offered for the premium paid for the policy under Section 80 D of the Income Tax Act. The deductibles are highlighted in the table given below.
Total Deduction | Scenario |
Rs 25,000 | For family and self. All individuals are required to be below 60 years of age.
|
Rs 25,000 + Rs 25,000 = Rs 50,000 | For family, parents and self. All individuals are required to be below 60 years of age. |
Rs 25,000 + Rs 50,000 = Rs75,000 | For family and self. All individuals are required to be below 60 years of age. This also includes Parents who are senior citizens. |
Rs 50,000 + Rs 50,000 = Rs 1,00,000 | For family and self. The eldest member is required to be above 60 years of age. This also includes Parents who are senior citizens.
|
The savings one can avail of may vary depending upon the policy they hold and the amount of premium they pay.
What documents are required to claim the benefit?
The documents required to claim the tax benefits are-
- Payment receipt of the premium
- A copy of the insurance policy. The copy should clearly state the name of the family members, their relation and age.
- You will also need an 80D certificate if you have purchased the health insurance policy for your parent.
Essential points to consider while claiming tax benefits
- Always make sure to go through tax exemptions in your policy carefully. Do not miss any small details.
- Always use cheques or online transfers or other modes for payment of the premium and avoid cash payments. You can pay for preventive health check-ups in cash.
- The maximum tax benefit offered under section 80D is up to Rs 1,00,000. This is applicable for health insurance for yourself and your parents. This is also applicable if both- you and your parents are senior citizens.
- The tax benefits can also be claimed by HUF (Hindu Undivided Family). This is applicable for a premium paid for insuring the health of any member of the HUF.
- The tax benefits offered to senior citizens can also be spent on their medical expenses.
- The tax benefits are applicable for the total tenure of the insurance cover if you pay all the health insurance premiums at once.
Tax benefits of Health Insurance add to the efficacy of the insurance policy. Make sure to purchase a health insurance policy to avail of benefits and for the betterment of your family. The policy not only acts as a beneficial tax planning tool but also is a wise investment opportunity. It’s time to invest in one!
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