Without health insurance, your insurance portfolio may always be lacking, regardless of how many other insurance plans you choose to get. Medical emergencies are unplanned events that can occur to anyone at any time, so people need to be prepared to deal with them when they do. If you do not believe you can purchase a health insurance plan, you need to be ready with alternative strategies to deal with unexpected medical expenses and pay off any outstanding hospital debt.
What does “health insurance” mean?
A health insurance policy not only helps you to receive protection against the financial expenses incurred on the treatment but also allows you to earn a tax deduction on it under Section 80D of the Income Tax Act.. Section 80D deductions on medical insurance expenditure states that you can deduct insurance premium expenses from your taxable income.
Various kinds of health insurance:
- Health insurance on an individual basis.
- A floater for the family
- Insurance coverage for senior citizens.
- Critical illness insurance.
Per section 80D, what kinds of deductions are available?
You can deduct some medical expenses from your taxable income thanks to the provisions of Section 80D of the Income Tax Act. The following items qualify for a deduction:
Both for oneself and one’s family
A taxpayer can claim a maximum annual tax exemption* of 25,000 for the cost of health insurance premiums paid for themselves, their spouse, and any dependent children.
Regarding health insurance premiums, an individual older than 60 can deduct up to 50,000 per year under Section 80D of the tax code.
Additional allowance for deduction
You are eligible for a deduction of up to 5,000 per year for costs associated with obtaining medical checkups. The limit accounts for medical care costs incurred by all family members, including spouses, parents, and children.
It is also acceptable for a Hindu Undivided Family (commonly known as a HUF) to submit a claim for a deduction under Section 80D. Individuals under 60 who fit into this category are eligible for a deduction of approximately 25,000 Rs. The conclusion will be increased to Rs 50,000 if the covered person is a senior citizen applying for senior citizen health insurance.
What are the requirements to qualify for the deductions under section 80D?
Section 80D enables taxpayers to claim a tax deduction related to their medical insurance. The premiums for health insurance that have been paid for the members of the family listed below are eligible for tax deductions.
- Self \Spouse.
- Dependent parents.
- Dependent kids.
However, one of the essential details you need to remember when paying a health insurance premium to get a tax benefit under Section 80D is that you will only be eligible for the tax benefit if you pay the premium in modes other than cash. This is one of the essential details you need to remember when paying a health insurance premium to get a tax benefit. Therefore, make sure you pay with a mode other than cash to take advantage of the tax deductions.
Tax benefits are subject to change in tax laws
‘Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.‘
*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C apply