Health insurance plans come with a host of benefits to help you tide through any medical crisis. But the often-repeated benefit that helps sell a medical plan is the tax benefit. This is the one everyone keeps talking about even without knowing much of the details. A health insurance policy is much more than just tax benefits, but if you can save some money while getting adequate medical care, why not do it? Save tax under section 80D is associated with tax benefits on insurance products. This means that you will get tax benefits on the premium amounts you pay on the insurance policy. The tax deductions can go up to a maximum of Rs 1 lakh per annum. This is definitely a massive saving in addition to getting health insurance benefits with your insurance policy.
Section 80D of the Income Tax Act, 1961 under this section eligible taxpayers can save their tax deductions as they paid the premium of health insurance policy in a financial year. Apart from paying the regular premium, you can save taxes on the top-up plan or any critical illness plan also. Anyone in your family can save the taxes by buying an insurance plan under section 80D.
Let’s get the details out in the open for you to know and use them to your maximum advantage.
For a mediclaim policy, you can claim tax deductions as specified in the table mentioned below.
| Health Insurance Premium for Self & Family | Health Insurance Premium for Parents | |
|---|---|---|
| Below 60 years | Rs 25,000 | Rs 25,000 |
| Above 60 years | Rs 50,000 | Rs 50,000 |
A tax deduction of Rs 5,000 can also be claimed on expenses incurred from preventive health check-ups. This limit applies to all expenses that occur during the health check-ups in a family.
Table Content
How Does It Work?
The income tax act has set the limits for such deductions based on various parameters and depending on who has bought the policy. Following are the details for the same:
Benefits for Insurance Premium for Your Family
If you have bought a health insurance policy for yourself and your family, you can claim to save tax under section 80D and tax benefits up to Rs 25,000/- per annum. This would mean you get the best medical care in some of the best medical centers in times of need even as you get to save money for making a provision for that by purchasing an insurance policy. In case you’re a senior citizen, the tax benefit limit extends up to a maximum of Rs 30,000 per annum on the premium paid. Additional money in your pocket to take care of some other priorities as well!
Benefits for Insurance Premium for Your Parents
Apart from your financial gains as mentioned above, you can also get tax benefits by providing health care benefits to your parents. They are the ones in need of maximum medical care as with age, complications also increase. The way hospitalization expenses and treatment costs are rising it is a wise decision to provide your parents with a health policy at the earliest. Once you buy a plan and pay premiums out of your pocket, you can claim deductions to a maximum of Rs. 25,000/- per annum. In case your parents belong to the senior citizen category and you’re paying for their health insurance policy, the maximum limit goes up to Rs. 30,000/- per annum to claim tax benefits.
Preventive Health Check-Up
This is yet another benefit provided to you under the income tax act. This means that if you have to undergo a preventive medical check-up and conduct some tests, you can do so and claim tax benefits for the same too. The limit prescribed under the act is a maximum of Rs. 5,000/- per annum. However, under this category, the beneficiaries will be you, your spouse, your kids, and your parents. Also, this is not an individual benefit, but a cumulative one covering everyone in your family including your parents. Therefore, for example, if you and your father go for a check-up and the total expense incurred is Rs. 7,000/-, then you can claim a deduction of Rs. 5,000/- only and not more than that. The income tax act has provided these health care benefits with limits so as to ensure there is no exploitation of the same. Also, the intention is to ensure that citizens are encouraged to buy health insurance.
Who all are Eligible?
As per the income tax act, any and every taxpayer is eligible to claim these tax deductions under section 80D. One can buy a health insurance policy for any or all of the following family members:
- Self
- Spouse
- Dependent Children
- Parents
The only factor to be considered is that the total insurance premium payment should not exceed the maximum deduction limit. Even if it does, you can claim the benefit only up to the limit and not beyond that.
Deduction Under Section 80D for Super Senior Citizen
Well, very few people are aware of this, or very few people live till 80 years, as per IPC 80D senior people of 80 years or more than 80 years who don’t have a health insurance policy can also claim the deduction of the amount of Rs 50,000 in the name of regular health check-up and treatments which he/she going through. Very few insurance policies offer the policy for the age of 80 years, people, maybe that’s why few people know about the benefits of tax deduction.
Section 80D is a boon when it comes to health insurance benefits. Make the best use of it by investing wisely and ensuring that you and your family members are insured against any medical emergencies.