Ways To Save Tax With Health Insurance
Published On May 03, 2021 5:30 AM By KANIKA WADHWA
Tax planning is an essential aspect of financial planning, and it must be performed carefully in order to achieve the dual-objective, i.e. When you have a medical emergency, we will help you achieve your financial goals and To save money on taxes per year.
Ways To Save Tax With Health Insurance
Before you invest in the right health insurance to lower your income tax liability while remaining safe, take a look at some of the main advantages of doing so:
- Health insurance is one of the best investment opportunities on the market, since it provides you with a number of advantages.
- It protects you in the event of a medical emergency. In the event of an adverse event, it covers the expense of medical attention.
- There are also other advantages of having health insurance, including tax advantages, cashless hospitalisation, domiciliary care costs, and so on.
Let's look at how health insurance will help you save money on taxes -
There are some essential rules under Section 80D that allow you to exclude the premiums charged for one or more health insurance plans obtained for your family (spouse and children) and parents from your taxable income.
- Save Money On Your Health Insurance Premiums: As a policyholder, you are eligible for a deduction of up to Rs. 25,000 per year, based on the premium you pay for a health insurance policy. You, your partner, and your dependent children will all benefit from the policy's coverage. If you or your spouse is 60 years old or older, the tax benefits on senior citizen health insurance policies will be increased to Rs. 50,000. This cap is supplemented by Rs. 5,000 in extra compensation for health check-ups for family members, including parents, spouses, and minor children.
- Section 80DDB allows you to save money on taxes (Treatment of Critical Illnesses): Your health insurance policy offers tax deductions up to Rs.40,000 and Rs.60,000 for senior citizens, and Rs.80,000 for very senior citizens, in addition to defending you against critical diseases. Health costs incurred due to a specific condition, such as cancer, chronic renal failure, or cardiac disease, are eligible for a tax deduction ranging from Rs. 40,000 to Rs. 80,000. The list of illnesses protected by Rule 11DD includes several particular illnesses. When filing an income tax return, you must have a certificate from a doctor. You can assert these benefits for yourself, your partner, your parents, and your children.
- Using Section 80DD to Plan Your Taxes (Treatment of a Dependent with Disability): You can claim a deduction of up to Rs. 75,000 if you pay for the treatment of a disabled person (only if the disabled person is your spouse, parents, children, or siblings). A caretaker is liable for a tax deduction of up to Rs. 1.25 lakh for expenses incurred for medical treatment, training, rehabilitation, nursing, and maintenance of a dependent with a disability.
- Section 80U allows you to save money on taxes (Person with Disability): Section 80U allows an individual with a disability to claim a tax deduction of Rs. 75,000. The cap is increased to Rs. 1.25 l in cases of serious impairment.
- Medical Allowance Deduction under Section 17 of the Internal Revenue Code: Medical expenses paid by your employer as part of your compensation under the medical allowance for you or your family (i.e. siblings, children, spouse, and dependent parents) are liable for an income tax deduction of up to Rs. 15,000 per financial year.
Also Read: Best Tax Saving Investment Options
If you have any questions, you should contact an insurance company or check online. Customers will also get help from insurance providers through their respective Customer Care Units. We hope you found this article helpful in learning about the tax benefits of health insurance.
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.