Over 80% of people in India do not have a health insurance cover
Claim tax deductions up to Rs. 5,0000 for preventive care check-ups
The tax deduction limit for senior citizens is Rs. 50,000 u/s 80D of IT Act
Today, health insurance is an essential tool for any individual. It protects you financially when you face medical emergencies or require expensive treatment. However, findings of the National Sample Survey reported that over 80% of people in India do not have any type of health cover [1].
Medical insurance not only safeguards your health but also helps you save money. What’s more, you can use it as a tax-saving instrument as well. The Government of India encourages people to buy health insurance by allowing tax deductions under Section 80D of the Income Tax Act of 1961. Read on to know how you can save tax with health insurance u/s 80D.
Additional Read: How Section 80D of Income Tax Act: Health Insurance Tax Benefits
Section 80D of the income tax Act offers tax deductions on premiums paid for medical insurance in a financial year. It includes a premium towards health insurance for self, spouse, dependent children, and parents. The tax deduction benefit under this section is also available for premiums paid on top-up and critical illness plans along with the regular insurance premiums. This act provides deductions over and above the exemptions included in Section 80C of the Income Tax Act.
An individual or Hindu Undivided Families (HUF) taxpayers can avail deductions on health insurance premiums paid for:
A HUF can claim tax deductions on premiums paid for any member under this section, so long as it is within the upper limit. Further, only individual and HUF categories of taxpayers can claim deduction on health insurance premiums and medical expenses paid for senior citizens [2]. A firm, company, or any other entity cannot claim any deductions under this section.
An individual and HUF can claim tax deduction under this act for the following payments:
The tax deduction limit for individuals and HUF under this act is up to Rs. 25,000 per financial year. The deduction limit in the case of senior citizens is Rs. 50,000 [3]. The said limits apply to premiums paid for health insurance of self, spouse, children, and dependent parents. The deduction limit on health insurance premiums are as follows:
The Indian government in 2013-14 introduced tax deductions on expenses of annual preventive health checkups under this act of the Income Tax Act. The amendments were made to encourage people to undergo preventive care checkups as it helps in the timely prevention of illnesses.
This act allows you to claim a deduction of up to Rs. 5,000 per year on the cost of preventive health check-ups. This limit of Rs. 5,000 is included within the maximum deductible limit i.e Rs. 25,000 for individuals and Rs. 50,000 for senior citizens. Tax benefits can be availed on preventive health expenses incurred on yourself, your spouse, children, and your parents.
There are certain things you need to note while buying health insurance, which are:
Additional Read: Need of Health Insurance: Top Reasons Why Term Insurance Isn’t Enough
The right health insurance policy reduces stress and gives a sense of protection. For this, you need to carefully choose a policy that meets the health needs of you and your family. Consider buying the Complete Health Solution plans offered by Bajaj Finserv Health. These plans offer you a medical cover of up to Rs. 10 lakh. With benefits like preventive health checkups, network discounts, and reimbursements on doctor consultations, these plans provide wide coverage to your family. Sign up now to start investing and save your taxes!
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