All You To Know About Health Insurance Premium Tax Exemptions
Updated On Feb 11, 2021
Purchasing a health insurance can help you in saving income tax at the end of the financial year. The Income tax department permits tax deductions for individuals who invest in health insurance or life insurance policies especially if it is provided by the Government.
An individual in order to be exempted from tax payment should consider investing in a health insurance plan towards the beginning of the financial year. A person should purchase a health insurance plan that offers long term benefits and at the same time enables them to save taxes.
Tax Exemptions on Premium for Health Insurance Plans
Tax exemption is offered on the payment of premium on the health insurance plans under section 80D of the Income Tax Act. The payment can be done by an individual or a HUF. Health insurance plans deductions are permitted for self, spouse, children, and when it comes to Hindu Undivided Family, then it is permitted for any member of the family.
The amount of tax exemption that can be claimed by a policyholder on a health insurance plan at the time of filing for taxes under section 80 D of the Income Tax Act is Rs. 25000. Whereas for a policyholder having a senior citizen health insurance policy, the amount that can be claimed as a tax deduction when filing taxes is Rs. 50,000.
Tax Deductions Available To A Health Insurance Policyholder
Following is the maximum deduction that can be claimed by an individual for a health insurance policy under section 80 D of the Income tax act:
|Category||Health Insurance for self,spouse and children||Health Insurance for Parents( whether dependent or not)||Total Tax Deduction under section 80D|
|No member is 60 or more in age||Rs. 15000
||Rs. 15000||Rs. 30000|
|Policyholder and family members under 60 years but Parents above 60 years in age.||Rs. 15000||Rs. 20000||Rs. 35000|
|Both policyholder and parents above 60 years||Rs. 20000||Rs. 20000||Rs. 40000|
Documents Required to Claim Tax Deductions
A copy of the health insurance plan (showing the names of all insured members of the family, their relation along with age) and receipt of premium payment should be kept at the time of claiming tax deductions.
Key Points to Remember About Health Insurance Tax Benefits
You should keep the following points in mind about tax exemption on health insurance policies:
- Health insurance policies should be bought from a reputed insurance company( company should be in existence for at least 5 to 10 years or more longer).
- The amount of premium paid on a health insurance plan ought to be Rs. 10000 or more in value
Under section 80D tax exemption can be availed in addition to deductions available under section 80 C up to an amount of Rs 150000.
- The amount available on deductions for senior citizens can be spent on healthcare expenses.
- Payment of premium in one go for a health insurance plan permits tax benefits for the total duration of the health insurance cover.
- The validity of a health insurance plan purchased for consideration of tax exemption should be for at least 10-20 years.
- Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.