Can Spouses Split Health Insurance Premium to Claim Tax Benefit Under Section 80D?

Buying health insurance has become the need of the hour especially during the coronavirus pandemic. This is because the hospital expenses and medical bills are surging with every passing day. Most policyholders take up the responsibilities of their parents as well as children which in turn increases the premium value manifold. This will put the burden on the policy buyer and he/she might not even be able to pay the premiums within the stipulated time. To provide some relief in such situations, the Health insurance companies offer the benefit of splitting health insurance plans to the individuals. It allows the people covered under the policy (spouses) to divide the premium bills, as it suits them and pay them for a single policy they are covered under. Also, the policyholders will be able to enjoy tax benefits under Section 80D of the Income Tax Act, 1961.

Tax Deductions Under Section 80D

There are several policyholders who are not aware of tax benefits that can be availed under health insurance plans offered by different general as well as health insurance companies. But one must know that those paying heavy health insurance premiums, take some burden off their shoulders by availing tax benefits. There are different deductions for aged parents, individuals, dependent children, as well as non-working or dependent spouses.

Tax Benefits For Aged Parents

Parents can avail tax deductions for up to a specific age if they cover their dependent children under the policy. However, the benefits are different when the policyholders buy a health insurance policy for their parents. In this case, where the parents are aged more than 60 years, the policyholder can claim huge tax deductions on the annual health insurance premium, ranging between Rs. 25,000 and Rs. 30,000.

Also, the policyholders buying policies under the senior citizen category, wherein the parents are aged more than 80 years, can avail annual deductions for up to Rs. 60,000.

Tax Deductions For Senior Citizen Policyholders

Policy buyers aged more than 60 years are offered an annual tax benefit of approximately Rs. 5,000 annually for future claiming of medical bills, under Section 80D of the Income Tax Act. Apart from that, there are additional benefits as well in case no claim is made for medical assistance.

Split Insurance Premiums and Tax Deductions

Under Section 80D of the income Tax Act, it is allowed for the spouses to split the insurance bills for a single insurance policy, into 2 parts. This way, you can claim a single cumulative tax deduction in all. This has proved to be a helpful way where both the individuals are earning as it reduces the burden of paying off the premiums from a single policyholder. Also, if the spouses decide to buy health insurance plans separately, then they can claim additional tax deductions under Section 80D. Under the health insurance plans, the spouses can also add dependent children, parents, etc, and avail tax benefits for up to Rs. 60,000 for either or both in case the parents as well as the policyholder are senior citizens.

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Final Words

Thanks to the tax benefits under Section 80D of the Income Tax Act 1961, it has now become very easy for and affordable for people to buy health insurance plans. With the deductions, you can also get some relief and buy health insurance plans with higher premiums without worrying.

For obvious reasons, tax deductions are highly appreciated by the people. But buying a health insurance plan, you should also get more and more information about the terms and conditions of the policy, so as to make an informed decision. You should also make sure that you pay for only the benefits that you want under your health insurance plan and don't end up paying for benefits that you don't really require.

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.