Medical insurance acts as a safety valve against unforeseen medical expenses. It is the most fool proof way of accessing quality healthcare in times of dire need. It boosts our moral and financial confidence in the face of grave medical treatments. Thus, purchasing medical insurance is the key to afford major treatments without facing debt. One should have a thorough understanding of medical aid they and their family require. Depending upon their needs, one can narrow down upon a policy.
Moreover, one can opt for tax exemptions for their health insurance premiums. This way their access to healthcare amenities becomes easier. The Government has implemented several policies with the motive of making quality healthcare accessible. Health Insurance Section 80D of the Income Tax Act (ITA) is one such example. It basically entails the deduction for medical insurance in the form of premium payable.
DEDUCTIONS FOR MEDICAL INSURANCE UNDER SECTION 80D:
Under section 80D of Income Tax Act, one can avail various tax benefits. One can claim deductions up to INR 25000 per financial year on the premium charged. Such a deduction for medical insurance is applicable for the policyholder, their spouse and their children.
One can also avail tax benefits for annual preventive health check-ups. The claim can be up to INR 5000 under health insurance section 80D.
One can avail deductions on the health insurance premiums charged for their parents. If the parents are senior citizens then the policyholder can claim up to INR 30000 per financial year. It also includes an additional sum of INR 5000 for annual health check-ups. Thus, it is evident that various deductions for medical insurance can be obtained under section 80D.
A key point to remember is that the deductions are applicable to online payment only. No tax benefits can be attained through premium payment via cash.
Thus, under Section 80D of ITA, an individual can get tax deductions for the entire family. However, one cannot claim tax benefits in the medical coverage for siblings. Members who are eligible for the deduction include the policyholder, their spouse, their children and their parents.
EXCLUSIONS UNDER HEALTH INSURANCE SECTION 80D:
Tax benefits cannot be attained if the health insurance premium is paid via cash. However, for annual preventive health check-ups, one can avail tax benefits.
The service tax charged on health insurance premium is 14%. There is no financial relaxation with respect to that amount. One has to pay the service tax and cess charges levied on the insurance premiums.
The tax benefits under Section 80D are not applicable for Group Health Insurance policies. However, sometimes the policyholder might want to enhance the medical coverage by paying a higher premium. In such cases, the taxpayer can avail reductions on the premium paid for group health insurance.
One can claim immense tax benefits and deductions in health insurance section 80D. The vital reason for owning medical insurance is to secure oneself against future worries. Thus, it is unwise to delay the purchase of medical insurance. One should scrutinise every word of their policy to derive proper medical aid and financial assistance. Make an informed decision today and stay ahead of your problems.