Tax Benefits In Health Insurance
Published On Jul 03, 2021
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Health insurance policies come with a huge list of benefits for their customers. The insurers make sure that you get a good health insurance policy experience by purchasing a policy from them. Apart from being medically secured, you can avail several other advantages on your policy like tax reduction, ambulance charges, preventive health checkup, no claim bonus, and a lot more. To avail these benefits, you have to purchase the policy and abide by the terms and conditions mentioned in the policy documents.
One of the widely known reasons to purchase a health insurance policy is to get tax benefits. Once you invest in a suitable health insurance policy, you become eligible to get a tax deduction on your premium payments. But, this should not be your sole reason to get a health insurance policy, as many people get a health insurance policy for the sake of getting over the taxes and forget to choose a policy that covers them completely.
Tax Deduction Benefits In A Health Insurance Policy
Under section 80D of the Income Tax Act, the policyholders are liable for tac reduction on their premium payments. This benefit is applicable on basic health insurance policies and add-on covers like critical illness plans, etc. You can avail the tax benefits either on your individual health insurance policies or on the family floater plans that you have purchased for your spouse, children, and dependent parent. The taxpayer of the policy is eligible to get the benefit. This benefit is only available for the policyholders, and therefore, a company or organization cannot take benefits of tax deductions.
An individual can get a tax deduction of up to Rs. 75,000 while a senior citizen can get a tax reduction of up to Rs. 1 Lakh. Tax deduction of up to Rs. 5,000 is allowed on preventive medical checkups. Availing of tax benefits reduces your tax liabilities and reduces financial stress on you and your family.
Different Scenarios In Tax Benefits of Health Insurance Policy
There are different cases that indicate the eligibility and deduction of taxes on your premium payments of the health insurance policy. Let us look at some of these common scenarios:
- If you and your dependent parents are a part of a health insurance policy then claim amount of up to Rs. 25,000 for yourself and an amount of Rs. 25,000 for parents can be allowed against your premium payments.
- If you, your family below 60 years, and your dependent parents above the age of 60 years are included in a health insurance policy, then Rs. 25,000 claim allowed against the premium paid for you and your family and Rs. 50,000 additional claims allowed against the premium paid for your parents.
- If you, your family, and your parents above 60 years are a part of a policy, then Rs. 50,000 claim allowed against the premium paid for you and your family and additional Rs. 50,000 allowed on premium paid for your parents.
- In the case of HUF (Hindu Undivided Family) claim of up to Rs. 25,000 for you and your family and Rs.25,000 premium paid for parents can be claimed as tax benefits.
- For non-resident individuals, Rs. 25,000 for you and your family is allowed. For the parents, tax deduction on the health insurance policy is considered only if they are above the age of 60 years, or are senior citizens.
Do not invest in a health insurance policy for the sole sake of saving taxes. You should consider the other medical benefits that you can get by purchasing a health insurance policy and therefore, accordingly invest in it, so that you can take advantage of the health insurance policy at the time of an emergency. Also, go through the policy-related documents carefully to make sure that there is no confusion while making claims in case of an emergency.
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.