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We all love to enjoy double benefits from a single payment. Health Insurance is also one such investment that gives double benefits. Health Insurance provides you with financial protection against medical emergencies, and at the same time, the premium paid for a health insurance policy is also eligible for tax benefits!
A health insurance policy premium offers tax benefits under section 80D of the Income Tax Act, 1961. You can also avail of tax benefits for the premiums paid for health insurance plans bought for your spouse, dependent children, parents.
A health insurance plan’s premium is eligible for deduction from your taxable income under Section 80D of the Income Tax, 1961.
|Health Insurance Plan for Self||Rs. 25,000/-|
|Health Insurance Plan for Self and Spouse||Rs. 25,000/-|
|Health Insurance Plan for Self, Spouse, dependent children up to age 25||Rs. 25,000/-|
|Health Insurance Plan for Parents||Rs. 25,000/-|
|Health Insurance Plan for Senior Citizens||Rs. 50,000/-|
|Health Insurance Plan for Self, Spouse, dependent children up to age 25 and Parents||Rs. 50,000/- (Rs. 25,000/- + Rs. 25,000/-)|
|Health Insurance Plan for Self, Spouse, dependent children up to age 25 and Parents||Rs. 75,000/- (Rs. 25000/- + Rs. 50,000/-)|
|Health Insurance Plan for Self and Parents (All Senior Citizens)||Rs. 1,00,000/- (Rs. 50,000/- + Rs. 50,000/-)|
The maximum amount of tax that you can save from a health insurance plan depends upon the tax bracket you fall under:
|Tax Bracket||Tax Saving|
This tax saving is over and above the tax amount that you save by making an investment in eligible instruments as listed in Section 80C of the Income Tax Act, 1961.
A health insurance plan for senior citizen parents is more expensive than a health insurance plan available for you or for your family. A senior citizen’s health insurance plan is also expensive because insurance providers also take into account the pre-existing ailments that they might be already suffering from or might suffer from.
Taking this important fact into account, the government of India, in its budget for the year 2018, decided to award some major relief to the senior citizens of the country who are already stressed with high medical bills and cannot afford to buy a health insurance plan or continue their existing plan.
As per the new amended, Section 80D, allows a deduction of the medical expenses incurred by senior citizens. This deduction can be claimed by the senior citizen or by his/her children if they are paying medical expenses for their senior citizen parents.
Tax Benefits on Preventive Medical Checkups
Premium payment receipt of a health insurance plan is the only document that you need for claiming the tax deductions under section 80D of the Income Tax Act, 1961 .
Sometimes your employer might ask you to also submit a copy of the policy document showing your name along with the members covered under the plan, their age, and your relationship with the members covered, i.e., Spouse, Children, etc.
In case you are paying premiums for your parent’s health insurance policy, you should ask the insurance company for an 80D certificate stating premium payment has been made by you. Here you have to provide the insurance company with information about the payment source.
For example, the Credit Card in your name, which was used for making a premium payment, or your bank account, which was used for making online or cheque payment.
Health insurance plans are the best option for protecting your savings from medical-related expenses. It also helps you bring down your tax liability by allowing you to deduct up to Rs. 1 lakh from your taxable income under section 80D of the Income Tax Act, 1961. It is a very effective tax planning instrument making it a must-have for a financially and healthy secure future.