Learn when one can deduct taxes on health insurance Premiums. For more information, check out the car insurance policy from Kotak General Insurance.
No one ever intends to get sick or develop a disease. However, at some point in life, we all require medical assistance. Because of the rapidly rising cost of healthcare and treatments, you need to have a health insurance policy, no matter what age group you fall into. The Government of India has implemented several initiatives where they promote investing in health insurance. Also, health insurance premiums are tax-exempt under section 80D of the Income Tax Act 1961.
Section 80D of the Income Tax Act helps and reduces a taxpayer’s tax obligations by lowering their taxable income. As an individual or a member of a Hindu Undivided Family, HUF, the premium amount you pay against a health insurance policy for yourself, your spouse, children, or other dependent family members is deducted from your entire taxable income. Below are the ways through which one can deduct taxes on health insurance premiums under Section 80D:
1. Section 80D permits you to claim a tax deduction of up to INR 25,000 for the health insurance premiums paid for yourself or your family. You can avail of an additional tax benefit of INR 25,000 if you purchase health insurance for your parents who are below the age of 60 years. Therefore, in total, you can avail of up to INR 50,000.
2. In case your parents are above 60 years, you can claim a tax deduction of up to INR 50,000. In this situation, the total tax benefit you can claim is INR 75,000 (INR 25,000 for the premium paid for yourself, your legal partner, and children+INR 50,000 for your parents falling under the senior citizen category).
3. In case the individual paying tax and his/her parents both are above 60 years, the total tax benefit they can avail is INR 1,00,000 (INR 50,000+INR 50,000)
While filing the income tax return (ITR), you need to fill up the claim for tax exemption on health insurance premiums. You may follow the below simple steps.
1. To claim the health insurance premiums and tax benefits, select 80D in the ITR declaration.
2. Choose the relevant criteria, such as
• Health insurance premiums for self or family
• Self-being 60 years or above
• Self and parents
• Parents above 60 years
• Self+family+parents above 60 years.
3. Attach all the supporting documents and submit them.
Health insurance is an essential element in life to protect you and your family during any medical emergencies. You can avail of tax benefits on the health insurance premiums you pay. Hence, evaluate your need and choose carefully whether you want to add dependent parents to get more claims and more tax deductions. Do not forget to include these exemptions while filing the income tax return.