New Delhi: As you strive to build your wealth, it's equally vital to safeguard your health, as a medical emergency has the potential to disrupt the core of your financial strategy. Health insurance not only serves as a protective shield in unforeseen crises but also offers tax benefits under Section 80D of the Income Tax Act, 1961 to the insured individual, aiding in the preservation of financial stability.
In the face of escalating medical inflation, it is essential to maintain a health insurance policy that provides adequate coverage for both you and your family, while also offering tax benefits during the tax season. This rebate is accessible to all individuals, encompassing self-employed and salaried policyholders, and extends to cover spouses, children, and parents.
Furthermore, when acquiring health insurance for parents, the policyholder is eligible for health coverage benefits and tax deductions, in addition to those available under Section 80C. Here is a comprehensive guide to safeguarding both your health and finances through health insurance:
Eligibility requirements for deductions under Section 80D
Tax benefits under Section 80D can be availed by furnishing evidence of the health insurance premium payments made. The highest deduction permitted under this section is Rs. 25,000 for oneself, the spouse, and dependent children.
However, for individuals paying health insurance premiums for their parents, the tax deduction varies based on their age. Specifically, the maximum tax deduction is Rs. 50,000 if either or both parents are aged 60 or above, qualifying as senior citizens.
Nonetheless, if their age falls below 60 years, their maximum deduction is capped at Rs. 25,000. Consequently, one can potentially save up to Rs 75,000, as stipulated by the terms and conditions, by selecting health insurance. Furthermore, if a senior citizen pays premiums for their senior citizen parents, they can claim deductions of up to Rs 100,000.
Medical check-ups for preventive purposes as per Section 80D
In order to promote a healthy lifestyle and the overall well-being of its citizens, the government provides a tax deduction of Rs. 5,000 for preventive health check-ups as per Section 80D of the Income Tax Act. This deduction is available within the standard limits set by Section 80D, which include Rs 25,000 for oneself, spouse, and children, and Rs 50,000 for senior citizen parents.
Exclusions in health insurance policies
Section 80D excludes the following situations from its coverage. Any expenses incurred for adult working children, siblings, grandparents, or other relatives. Likewise, if your employer covers the premium under a group health insurance policy, it does not qualify for a tax deduction.
In summary, making a prudent investment in a health insurance policy is crucial, as it enables you to enjoy the advantages of both medical expense coverage and tax savings. Therefore, exercise diligence in your research, utilize online comparisons of different policies, and make a well-informed choice. Additionally, carefully scrutinize the policy's inclusions, exclusions, and fine print to avoid any unexpected surprises down the road.