What are the tax benefits of health insurance?

Posted by Radhika Adsule on June 8th, 2021

Staying healthy and fit is a motto for all human beings. If you are taking care of your and your family’s health, you will lead a happy and carefree life ahead. However, considering the rising costs of hospitalisation and medical treatment, you should plan your finances and save as much as possible for emergencies.

Health insurance is essential as it ensures you do not exhaust your savings after an illness and provides sufficient coverage. Most importantly, you also get tax benefits after buying the policy. It helps you save on most of the tax payments included in medical bill payments.

Section 80 D

The Government of India offers individual taxpayers a deduction on premiums under Section 80 D of the Income Tax Act. You can claim up to Rs. 25,000 in a financial year, including the amount for you, your spouse, your parents, and your dependent children. If you or your spouse is 60 years and above, the deduction limit goes up to Rs. 50,000. The deduction extends to cover any health check-up of up to Rs. 5,000 you may have had in that financial year.

Section 80 DD

If you have a dependent spouse, parent, or child with a disability, you can claim tax benefits on your health insurance policy up to Rs. 75,000 based on the expenses incurred for nursing, medical treatments, rehabilitation, etc. In cases of extreme disability, you can claim up to Rs. 1.25 lakh with dependents, including your spouse, children, parents, or siblings, by submitting supporting medical certificates.

Section 80 DDB

If you are undergoing treatment for a specified illness, you can claim a deduction of up to Rs. 40,000 for all medical expenses incurred from your medical insurance. The limit on behalf of senior citizens is up to Rs. 1 lakh, including treatments for diseases given in Rule 11DD of the Income Tax Act. You can claim this deduction for self, spouse, parents, guardians, children, and siblings.

Points to note

The premium payments should be either through online banking, draft, cheque or debit or credit cards to avail the tax benefits. You cannot get a tax deduction for cash payments. However, the tax benefits do not extend to group insurance premiums paid by your employer.

With an insurance plan, you can safeguard yourself and your family from unexpected medical expenses and prevent bankruptcy. You can easily choose and compare the schemes while earning tax benefits.

Conclusion

You can also buy online health insurance by visiting the insurance provider’s website and filling in the details on the online form. It saves time and paperwork and stands valid for all medical payments in hospitals.