Health insurance covers you against unforeseen medical situations and offers tax benefits
Tax deductions on health insurance under Section 80D
Tax-saving options for preventive health check-ups
Senior citizens can get a higher tax deduction
With the increasing cost of medical expenses, having health insurance has become almost mandatory. Without health insurance, getting medical treatment is very difficult and expensive. Moreover, insurance brings in protection and provides tax benefits under Section 80D.
The Income Tax Act of 1961 has provisions for tax deductions on health insurance under Section 80D. Any individual can claim the deductions from their total income for health insurance premiums paid under Section 80D. These medical expenses deductions are available for various health insurance top-up plans and critical illness plans. This health insurance tax benefit is available for health insurance plans for self and covers spouse or dependent children or parents.
The individuals who regularly pay taxes are eligible for deductions under 80D. Below are the people who are eligible for the same:
Individuals can claim the deductions under section 80 D for the below-mentioned payments:
The deduction allowed under Section 80D is Rs. 25,000 in a financial year. In the case of senior citizens, the deduction limit allowed is Rs. 50,000. The below detail captures the amount of deduction currently available FY 2020-21 and FY 2019-20 to an individual taxpayer under various scenarios:
Individuals can enjoy the tax benefits only when they make health insurance premium payments through non-cash modes like online banking, cheque, demand draft, debit or credit cards, etc. This rule does not apply to the preventive health check-ups, you can still avail of tax deduction in this scenario.
Apart from healthcare plans, regular health check-ups are vital to understanding how your body functions and diagnosing any health issues early on. Section 80D also offers tax-saving options for preventive health check-ups. If you or a family member has undergone a preventive health check-up, you can get an extra rebate of Rs. 5,000.
This scheme was introduced to encourage people to get themselves checked from time to time. Early diagnosis and prevention can save you a lot of money in treatment costs, along with saving your life.
Bigger savings for senior citizens insurance providers rarely want to sell policies to senior citizens due to the high risk involved, and the plans they sell are expensive. Keeping this in mind, Section 80D has additional provisions for senior citizens. You get a higher upper limit on your tax deduction while covering senior citizen parents.
Moreover, if you are a senior citizen who has dependent senior citizen parents, your tax deductions will be even higher. Thus, you can enjoy many tax benefits by protecting your health.
Features of a Health Insurance
Additional Read: Health Insurance Plans Available In India
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