The point of getting insurance is that it is a high level of certainty. Insurance is a binding agreement between the insurer and the insured party that provides the insurer with access to the best possible care, depending on the purchased policy. The basic need is to make sure that you and your loved ones are always safe no matter how bad the situation may be. This article focuses on how to save tax with health insurance.
There are many financial benefits associated with insurance policies and can learn how to save tax with health insurance. Aside from the great cover offered by insurers, the tax benefits are many. The sections of the Income Tax Act under which you can save money on insurance are section 80D and section 80C.
The Income Tax Act, 1962- Section 80C
Section 80C includes a complete list of investments that if made by you, you can claim tax deductions while submitting your taxes. Some of them are Employee Provident Fund, Public Provident Fund, Life Insurance, Infrastructure bond, and more. These plans and investment opportunities are listed and you can choose anyone that is most profitable for you.
A medical insurance premium will be claimed for Rs. 50,000. (Rs 25000 for spouse and children and Rs 25000 for dependent parents under the age of 60). Claim medical insurance premiums of up to Rs 1, 00,000 per annum if available for senior citizens. If they are not covered under any health insurance, the medical costs incurred may be claimed as per 80D up to Rs 50,000.
The Income Tax Act, 1962- Section 80D
Section 80D refers to the tax benefits you may receive from the health insurance premium that you may have paid during the financial year. Medical insurance is one of the crucial types of insurance. It ensures that you are covered in the event of an unexpected injury and/or hospitalization. The main benefit of health insurance is hospitalization without money, which ensures there is no delay in getting the best possible treatment.
The maximum allowable deductions vary in the various cases below:
People can claim a maximum deduction of Rs 25000 for the premium of their insurance, spouses, and dependent children.
People can claim up to Rs 50,000 in deductions including personal, spouse, child support and foster parents under 60 years of age.
Although, Individuals may require a maximum deduction of up to Rs 75,000 including personal, spouse, child support, and foster parents over 60 years of age.
An additional Rs 1, 00,000 can be claimed as a deduction if a person is over 60 years old and pays his or her salary, spouse, dependent children, and parents over 60 years of age.
Section 80D includes deductions of Rs 5000 for any payments made on health screening tests. This catch will be within the total limit of Rs 25,000 / Rs 50,000 as possible.
These deductions may be claimed by an individual, his or her spouse, dependent children, or parents. Payment for health screening tests can be made in cash.
Things to remember while claiming exemption under Section 80D
Health Insurance Policy
Health insurance comes in a variety of forms and can be customized to fit the needs of existing patients. Payable premiums can be used to apply for tax-deduction.There are packages based on the age of insurance and the benefits are well worth it. OPD inclusion is limited, while young families or couples benefit from maternity cover. The older generation receives appropriate benefits for senior citizens, including coverage for other treatments such as AYUSH, lack of rental room, and more. Paying for yourself and your family health insurance, with high-income parents relying on you, makes you eligible for tax up to 1 lakh rupees.
Benefits of Health check-ups
As per Section 80D, if you make a payment of a premium of Rs. 20,000, and the avail medical examination of Rs. 5,000, you will be eligible for a tax deduction of up to Rs. 25,000. Many hospitals offer health insurance packages along with their health insurance.
Government introduces deductions on health screenings in 2013-14 to encourage citizens to focus more on health. The idea of health screening is to diagnose the occurrence of any disease and to reduce risk factors early with regular medical check-ups.
In addition, both the “indemnity” and the “defined benefit” health insurances are tax-deductible. Therefore, even hospital financial plans and critical illness plans are eligible for tax benefits.
Requisites for availing tax exemptions
The maximum deduction can be 1 lakh rupees in case you and your parents are in the senior citizen category.
Premium must be paid in any mode other than cash.
The proceeds of the detention of elderly residents may also be used for medical expenses.
Now that you know the tax savings aspect of health insurance and how to save tax with health insurance keep finding out what you can do with any situation you are filling out. As you go along, don’t forget that you will not be able to get tax benefits with a premium for a policy paid for siblings.
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LegalWindow.in is a professional technology driven platform of multidisciplined experts like CA/CS/Lawyers spanning with an aim to provide concrete solution to individuals, start-ups and other business organisation by maximising their growth at an affordable cost.