Having the right health insurance policy can be a blessing in your time of need. The assurance that your medical expenses will be taken care of in an emergency surely offers peace of mind. But coverage and security are not the only benefits of a health insurance plan. There is an important cost-saver aspect that comes with a health plan, which is a tax concession. Read on to know the tax-saving feature of health insurance and understand how you can save taxes when you pay your health insurance premium.
As an individual or HUF, Hindu Undivided Family, you have the option to claim a tax deduction for the health insurance premiums that you pay, as per Section 80D of the Income Tax Act. The deductions are available in the following scenarios:
1. When you buy a health insurance policy from health insurance or a life insurance company
2. When you buy a life insurance policy and opt for a rider that includes critical illness, terminal illness or surgery coverage
3. When the policy is for:
c. Dependent children
d. Dependent parents
Note: There are some policies that offer coverage for your extended family as well, however, tax benefits may not be available for such health insurance premiums.
4. Premium paid towards group health insurance premium is not tax-exempted
5. Health insurance premiums paid in cash cannot be claimed for deductions.
Deductions available under Section 80D
When you buy a health insurance plan as an individual or as a member of the HUF, the following payments are eligible for Section 80D deductions:
• Health insurance premium that is paid for self, legally wedded spouse, dependent parents and children
• Expenses on preventative health check-ups
• Expenses incurred on the medical treatment of a senior citizen who isn’t covered in a health plan
• Contribution made to CGHS, Central Government Health Scheme.
The following will help you understand how you can claim the tax benefits when you pay health insurance premiums for different family members in a financial year:
While a medical emergency can come without knocking on the door, being prepared with a suitable health insurance plan is the only way to deal with such a situation. Tax benefits are the government's way to encourage more and more people to invest in a health insurance plan. Make sure you purchase a well-suited plan today.
Disclaimer: The content provided is for education and informational purpose only, none of the information contained in our blog amounts to any form of opinion or advice. Please go through policy related documents carefully or consult an expert before making any insurance-related decisions.