With medical inflation having risen in double-digits annually over the last decade, the recent budget brings respite to tax payers across the country. Investment in health insurance plans and policies serves as a protection against the soaring costs of healthcare facilities and medical services. Health insurance can prove to be a multifaceted scheme insuring your health and assuring your financial stability during times of health and medical emergencies. The article highlights all that you must know about tax deductions due to investment in health insurance.
Why should I choose health insurance over other investments?
Investing in a health insurance policy holds a dual objective. Not only are you saving tax up to a limit of Rs 25000 ( for self) and Rs 30000 (for senior citizen), but are also securing the health and longevity of your loved ones and yourself. While you rest assured of financial support in times of unforeseen medical and health-related exigencies, you also receive tax benefits on your Net Taxable Income in the process.
Who can I cover?
In India, you can invest in health insurance plans under two variants – Individual health insurance or a family floater policy. While the former covers each individual separately, the latter provides an umbrella coverage for the entire family, sometimes even parents-in-law in the same policy. Make diligent research before you finally choose to invest in a health insurance policy and keep in mind that family floater health covers provide a comprehensive coverage which can be individually utilised by any member of the family.
Is health insurance tax-deductible?
If your health insurance premium is paid by your employer or the government, it does not fall under the purview of tax deductions. To avail tax benefits, it is a mandate that you pay your health insurance premiums. Under Section 80D of the Income Tax Act, 1961, the deduction on insurance premium has been increased to Rs. 25,000 from Rs. 15,000. Ergo, tax savings for individuals in the 30% bracket will be Rs. 7,500, and for those in the 10% bracket it will be Rs. 2,500. Your health insurance policy serves as an efficient tax saving tool, providing substantial deductions from your Net Taxable Income.
Can I receive tax benefits on parents’ health insurance?
Most people tend to ignore parents’ health insurance when it comes to tax planning. You can claim an additional deduction of upto Rs 30,000 from your Net Taxable Income for the health insurance for parents. Not only are you gifting your parents the financial security during health crisis, but are also receiving additional tax savings.
Save your money, preserve your health
With drastically changing lifestyles and annually rising medical costs, the government is reaching out to help you do both, meet your financial goals, and save taxes in the process. The extra rebate in premium prices has come as a much needed relief to the tax payers. Health insurance covers the risk of most unforeseen illnesses and accidents. While a health insurance plan shields you from the ever-increasing medical costs, it also enables you to pay lesser tax. Invest in a health insurance policy today and reap multiple benefits!
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