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Tax Benefits of Health Insurance

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A health insurance policy is not an expense but an investment for the safe future of the entire family. Whether the hospitalization is planned or under an emergency, a health insurance policy is necessary to protect you from financial shocks. A few days of hospitalization can completely drain your savings and plunge you deep into debt. So download a health insurance app and buy a suitable plan immediately.

Apart from covering medical expenses, health insurance policies provide another major benefit. The premium expended on a health insurance scheme is eligible for tax deduction under section 80D of the Income Tax Act. The premium that you pay can be deducted from your taxable income every year. The combination of risk coverage and tax benefit makes health insurance policies a smart investment.

Tax Benefits on Health Insurance Policies

According to section 80D of the Income Tax Act, payment of medical insurance premiums is qualified for a tax deduction. Apart from basic health insurance schemes, tax benefits are also available for critical illness insurance plans and top-up health plans. Check the mediclaim app for further details on insurance plans and tax rebates.

This benefit is over & above the benefits available under section 80C with regard to life insurance policies. Only individuals & HUF taxpayers can avail of the benefits under section 80D.

According to section 80D, an individual/HUF can claim tax deductions for making the following payments.

  • Payment of medical insurance premiums by any mode other than cash
  • Any payment made by an individual to a central government health scheme or any such scheme as notified by the central government
  • Any sum paid by an individual in respect of a preventive health checkup
  • Medical expenditure incurred toward the health of a senior citizen if no amount is paid to buy health insurance for such a person.

For individuals who buy a policy on the health insurance app, the tax benefit under section 80D is available for policies bought for self, life partner, dependent kids, and parents, whether dependent or not. With respect to HUFs, the health insurance policy can be taken for the benefit of any member of such HUF.

Please note that the tax deduction for any medical expenditure is allowed if it is incurred for the health of senior citizens only. A senior citizen has been defined as a resident Indian individual who has attained the age of 60 years.

Amount of Tax Deduction Under Section 80D

In respect of individuals, the maximum amount of tax deduction is as follows.

  • Rs.25,000 (aggregate) for the health insurance premium and expenses on routine health checkups when payment is made for the benefit of self, spouse, or dependent children
  • Rs.25,000 (aggregate) for the health insurance premium and expenses on preventive health checkups when payment is made for the benefit of parents 
  • An additional deduction of Rs.25,000 is available if health insurance is taken for any senior citizen.
  • The total amount of deductible expenditures for precautionary health checkups of self, spouse, dependent children, and parents cannot surpass Rs.5,000.
  • Rs.50,000 (aggregate) toward any medical expenses incurred for self, spouse, or parents. This deduction can be availed if the expenditure is incurred in respect of a senior citizen and no amount is paid to avail of health insurance for such a person.

For a HUF, the maximum amount of deduction allowed for the premium disbursed on the health of any member is Rs.25,000 in aggregate. The said limit is increased to Rs.50,000 if the premium is paid in respect of any senior citizen.

Note: You now have the great advantage of buying a policy on a mediclaim app. The payment for the health insurance policy should be made by any mode other than cash. But the payment toward the preventive health checkup can be completed in cash also.

To sum it up, the deduction limit u/s 80D is based on the age of the primary policyholder. The maximum deduction allowed for policyholders who are below 60 years of age is Rs.25,000 and the maximum deduction allowed for policyholders who are above 60 years of age is Rs.50,000.

Navi Health Insurance

Apart from tax savings, it is also important to buy the right product to derive the maximum benefits of a health insurance plan. Download the Navi health insurance app and buy a policy in just 90 seconds. The key features of Navi Health Insurance are as follows.

  • 100% paperless process to buy policies within two minutes
  • Customizable health insurance coverage ranging between Rs.2 lakh to Rs.1 crore
  • A wide network of 10,000+ hospitals to provide cashless claims benefit to policyholders. The cashless claim is typically approved within 20 minutes.
  • Comprehensive coverage providing 20+ health benefits.
  • Lifetime renewability feature with no recurrent medical checkups every year

Navi health insurance has a 97% claims settlement ratio. You also get to pay the premiums through affordable monthly EMIs.

Conclusion

A good health insurance policy is a great blessing in today’s age of uncertainty & rising healthcare costs. The mix of insurance coverage and tax benefits makes it one of the best financial products in the market today. So download a mediclaim app, buy a health insurance plan, and enjoy the rewards!

For More Blog : dailytimezone.com

About Post Author

Dennis Johnson

Title Assistants is a comprehensive title and settlement services company helping businesses all over USA.
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Dennis Johnson
Dennis Johnsonhttp://titleassistants.com/
Title Assistants is a comprehensive title and settlement services company helping businesses all over USA.

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