All the Information You Need to Know About Health Insurance’s Tax Benefits
Because “health is wealth,” it is essential to look after your own and your family’s health. Given the rising costs of hospital stays and medical care, having health insurance or other medical coverage is imperative. In addition to guaranteeing that you won’t lose everything following a sickness, it provides adequate coverage. Most importantly, even if you decide not to utilize your health insurance, you still receive tax benefits.
Getting health insurance saves you money and provides benefits when it comes to income taxes.
The following is a list of the tax advantages of health insurance that you should know about. They could be useful to you in claiming applicable tax deductions.
The Income Tax Act’s Section 80D Deduction
The Government of India (GOI) states that individual taxpayers may deduct premiums paid under section 80D of the Income Tax Act from their taxes. You can also receive benefits on the premiums you paid for critical illness insurance.
In reference to oneself and one’s immediate family (spouse and dependent children):
When talking about the tax benefits of health insurance, the following things should be kept in mind. In this case, you are eligible to receive up to INR 25,000 in benefits during a financial year. This amount covers you, your spouse, and any dependent children. If either you or your spouse is a senior citizen, which means they are 60 years of age or more, the maximum deduction increases to INR 50,000. The deduction covers any medical checkup you may have had during that fiscal year, up to a maximum of INR 5,000.
For the parents/guardians:
The medical insurance premiums of parents or legal guardians may be reduced by up to INR 25,000 each fiscal year. For each financial year, the upper limit increases to INR 50,000 if one of your parents is a senior citizen.
The highest amount that meets the eligibility requirements is always the lesser of the actual premium and the maximum permitted by this section. The expense of the medical examination must be covered by this.
The Income Tax Act’s Section 80D Deduction
If you have a disabled dependant, you can receive up to INR 75,000 in health insurance tax advantages. The price of nursing care, medical services, rehabilitation, etc., is what determines this. Should your disability be severe, you could be qualified for up to INR 1.25 lakh. “Dependents” in this context means your parents, siblings, spouse, or children. To be eligible for the discount, though, you will need to present supporting medical certifications.
The Income Tax Act’s Section 80DDB Deduction
If you are being treated for a certain disease, you can write off up to INR 40,000 in medical expenses. If you are filing on behalf of a senior citizen, there is a benefit cap of INR one lakh. This covers treatments for diseases specified in Income Tax Act Rule 11DD. This sum can be written off for you, your partner, your parents or legal guardians, your children, and your siblings. You could deduct INR 60,000 and INR 80,000 for older (60–80 years old) and super senior (over 80 years old) individuals, respectively, up until the fiscal year 2017–2018.
Tax deductions are not available for group health insurance or monetary contributions.
Medical insurance premiums must be paid with debit or credit cards, internet banking, drafts, cheques, or drafts in order to qualify for the tax benefits that come with health insurance. A tax deduction is not available for cash installment payments. However, cash fees for the prophylactic physical examinations are acceptable and can be written off. Moreover, tax benefits are not available for group health insurance premiums that are paid for by the employer.
Now that you are aware of the tax benefits linked to health insurance in India, it’s time to put an end to your concerns about high medical expenses and begin saving money on health insurance.
Notice:
Read the sales brochure carefully before signing a contract to get more details on terms and conditions and risk factors.
