With healthcare becoming more expensive every passing year, getting health insurance policy for your family and yourself can prove beneficial. Our changing and rushed urban lifestyles and debilitating food habits have made it difficult to predict when any one dependent on you or yourself might need to make a trip to the hospital. Medical bills are not a matter for laughter and a health insurance cover brings some semblance of peace to the mind. Health insurance not only protects you from exorbitant bills but also provides certain benefits while filing your income tax return.
Primarily, the cost of medical treatment can be reduced through the premium you pay annually as a health insurance policy offers coverage for the medical and surgical expenses incurred by the policyholders. The Income-tax Act, 1961 provides certain tax exemption for an individual in respect of such expenditure incurred on self or dependents.
Health Insurance and Tax Benefits
If a person’s income is falls under the tax liability, then buying health insurance policy is a smart option for claiming medical insurance tax relief. Health insurance policies are one of the best investments in the market as they not only help you to reduce the cost of healthcare during medical emergencies but also help you to save on income tax annually.
The section under 80D of income tax covers three norms –
- If none of your family members are over 60 years of age
In the scenario of nobody in the family being above 60 years of age, you can claim a deduction up to Rs.25,000. For medical insurance paid for parents below 60, the deduction is up to Rs 25,000. Therefore, total deduction one can claim is up to Rs 50,000.
- If either of your parents is over 60 years of age
In this case, when one of the parents is above 60 years of age, a tax benefit of up to Rs 50,000 for medical insurance paid for parents is given. Also, for the premium you pay for the family (self, spouse, children), a deduction of Rs.25,000 can be availed. Thus, the available deductions total up to Rs.75,000 annually.
- If you or (any other family member) along with your parents are over 60 years of age
Under this section, if any family member (self, spouse or children) is above 60 years of age then a deduction of 50,000 can be availed. Additionally, if your parents are above 60 years of age, then you can claim a deduction of Rs. 50,000 bringing the total to Rs. 1 lakh.
In case you already have purchased a health insurance policy but are confused about how to claim your deductions while filing your income tax return, click here for assistance from a tax expert.