Medical emergencies can arise at any time and the treatment costs can chip away a huge part of your savings. Whether you are young or old, having health insurance by your side is a wise investment. This way, you pay a small amount towards your policy’s premiums every month or year. This is better than being hassled to pay a lump sum at a time when you incur huge medical expenses. The good news is that the premiums you pay offer tax benefits under section 80D of the Income Tax Act, 1961 .
The government allows these tax deductions to encourage you to buy health insurance and protect your health and that of your loved ones. Read on to know how you can claim tax exemption on your health policy premiums.
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Health insurance premiums are what you pay to the health insurer to provide you coverage against medical costs. You can select the term for premium payments. For instance, if you opt for a 1-year policy, you need to pay your premiums every year to keep your health insurance policy active. Similarly, if you buy a health plan for more than a year, you need to pay the premium during the purchase and before the renewal of the policy. Non-payment of the premium can lead your policy to get lapsed.
Here are the details of tax benefits you can claim against premiums paid for yourself, spouse parents and children .
In such cases, you can claim a deduction of Rs.25,000 if your health policy doesn’t cover your parents. By including your parents, you can claim an additional tax deduction of Rs.25,000. Now the total deduction under section 80D would become Rs.50,000.
If your parents are above 60 years of age and your age is below 60, you can claim a total tax deduction of Rs.75,000. Here, you get a tax deduction of Rs.25,000 for self, spouse and children as non-senior citizens, and additional benefits of Rs.50,000 for your senior citizen parents.
In the same rule, if you are a senior citizen with senior citizen parents, you can claim a maximum tax deduction of Rs.1 lakh.
Section 80D allows tax benefits on health insurance premiums paid for the following:
Here are some reasons why claiming tax deductions on health insurance premiums is beneficial.
You can claim tax deduction benefits while filing income tax returns. You need to follow certain steps for the same:
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Note that cash payments made for paying health insurance premiums are not eligible for a tax deduction. To claim tax benefits, you should pay the premium through credit cards, cheques, demand draft, or net banking.
Apart from protecting you financially, health insurance acts as a tax-saving instrument. Now that you know the tax benefits you can avail, invest in the right health insurance for yourself and your family. Consider the Complete Health Solution plans by Bajaj Finserv Health. These plans offer medical cover of up to Rs.10 lakh at affordable premiums along with a host of benefits. These include network discounts, preventive health check-ups, doctor consultations, and more!
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