It’s that time of the year again when tax planning is on everyone’s priority list. While one looks at growing their wealth, it’s also important to secure your health as a medical emergency can shake up the foundation of your financial planning.
Health insurance not only acts as a safety net in case of such unexpected crises but also gives the insured person tax benefits under Section 80D, thereby helping them preserve financial stability.
It’s crucial now to keep up with the rising medical inflation and have a health insurance policy that covers you and your family adequately and also comes to your rescue during the tax season. The rebate can be availed of by any individual, including self-employed and salaried policyholders, and also cover the spouse, children, and parents.
In fact, when purchasing health insurance for parents, the policyholder is even entitled to health coverage benefits and tax deductions, which are in addition to Section 80C.
Here’s all you need to know about securing your health and finances with health insurance:
Rebate criteria under Section 80D
One can claim the tax benefits under Section 80D by providing proof of the premium paid towards their health insurance policy. The maximum deduction allowed under this section is Rs. 25,000 for the self, spouse, and dependent children. But for the individual paying health insurance a premium for parents, the tax deduction varies as per age. To explain, the maximum tax deduction is Rs. 50,000 if one or both parents are above 60 years of age or senior citizens.
However, if their age bracket is below 60 years, their maximum rebate is up to Rs. 25,000. So, effectively one stands to save up to ₹75,000 as per terms and conditions by opting for health insurance. Also, if a senior citizen pays premium for their senior citizen parents, they are eligible to claim up to ₹100000.
Preventive medical examinations under Section 80D
To encourage a healthy lifestyle and general well-being for citizens, the government offers a claim deduction of Rs. 5,000 against preventative health check-ups under Section 80D of the Income Tax Act. This deduction is within the standard limit under Section 80D ( ₹25,000 for self, spouse and children, and ₹50,000 for senior citizen parents).
Section 80D does not cover the following scenarios: Any fee paid for working children, siblings, grandparents, or other relatives. Similarly, if your company pays a premium under the group health insurance policy, then it is not eligible for a tax rebate.
To conclude, investing wisely in a health insurance policy is essential, as it allows you to reap the benefits of medical expense coverage and tax savings. So, be diligent in your research and compare the various policies online to make an informed decision. Also, read the inclusions and exclusions and the fine print carefully, so there are no surprises later.