How to Save Income Tax on Health Insurance?
Do you have health insurance? If your answer to that was a NO – that is a big no to your safety and financial setup. But, if your answer was YES – just know, you are on the perfect track to betterment. So, do you pay taxes on your health insurance? That is exactly what we are going to be speaking about in this article.
Get Started with the Best Tax-Saving Tool in the Market
Health insurance is an important investment. It gives financial security for you and your family members in the cases of medical emergencies. A health insurance policy offers total coverage by assisting you in paying for medical expenses specified in the policy, whether it is an emergency or a planned hospitalization.
Aside from protecting your finances from escalating medical costs, you can also get tax breaks on your health insurance payments under Section 80 D of the Income Tax Act, subject to certain criteria. This makes health insurance a wise investment.
The Relationship Between Tax Saving and Health Insurance
Are you planning your taxes for this fiscal year? Great! Then you must be aware that the premium paid for health insurance for yourself or your family is tax deductible under section 80 D of the Income Tax Act. According to the legislation, any premium paid for health insurance policies for your children, family, or parents is deductible.
This deduction is available regardless of whether your parents or children are financially reliant on you.
There is also a threshold to the number of tax breaks you could take advantage of. The maximum deduction limit of the tax benefit is determined by the age of the covered person.
If the insured is under the age of 60, the maximum tax deduction available to him or her is Rs. 25,000 per year. However, if the insurance is purchased after the age of 60, the deduction is Rs. 50,000.
If you hold a health insurance policy for yourself and your parents over the age of 60, you can claim a maximum tax benefit of Rs. 100,000.
Aside from tax savings on premiums, you also get benefits on premiums paid for health check-ups. If you pay an Rs. 20,000 premium and a Rs. 5,000 health check-up, you would be eligible for a tax deduction of up to Rs. 25,000. Several hospitals provide health check-up packages in conjunction with a health insurance policy.
Health insurance coverage not only provides financial assistance in the event of emergencies – but it also gives a variety of additional financial benefits.
You also might have come across Section 80D, 80DDB medical expenditure, and so much more – well, let’s look at Section 80D and more and how it helps your finances in consideration of health insurance.
The Relationship Between Section 80D and Your Health Insurance Policy
Section 80 D of the Income Tax Act is open for tax deductions of up to Rs.50,000 for premium payments on health insurance policies for self and family. This tax break is available to residents, their spouses, children, and parents, as well as Hindu Undivided Families (HUF).
Different Types of Deductions
- Health insurance premiums for myself and my family have been paid.
- Parents’ health insurance premiums have been paid.
- Expenses for preventive health care.
- Super senior citizens’ medical expenses.
A health insurance policy is a complete blessing! It not only saves you money on taxes, but it also helps you earn tax breaks when you insure the health of your spouse, dependent children, and parents. The best aspect of saving tax under section 80D is that the deductions are in addition to those claimed under sections 80C/CCC/CCD.
The Relationship Between Section 80DDB and your Health Insurance
Section 80DDB tax deduction is covered in Chapter VIA of the Income Tax Act of 1961. Individuals and HUFs can claim tax benefits under this provision for medical treatment of specific disorders.
The Relationship Between Section 80U and Your Health Insurance
There are a few provisions of the income tax rules that allow tax breaks to those who are disabled or have family members who are disabled. Section 80U gives tax benefits to people who are disabled. Let’s look at the tax breaks offered under Section 80U.
A resident individual who has been certified as disabled by a medical authority may claim the Section 80U tax benefit. A person with a disability is defined in this provision as having at least 40% disability, as certified by a recognized medical authority.
The Biggest Takeaways from a Good Health Insurance
You must get a health insurance policy to protect yourself and your family from the wrath of unexpected, large financial outlays. Having health insurance is no longer an option; it is a must.
It is the start of an investment – You spend hundreds of rupees on a single healthcare visit. If you take health insurance casually and do not insure yourself and your family, you may have to use your funds to receive the necessary medical treatment. Because you never receive the correct health insurance when you truly need it, it is vital to plan for and obtain it when you don’t.
Your health is covered – Sedentism, an unhealthy diet, pollution, and tainted food have all contributed to an increase in the number of lifestyle diseases across all age groups. Your company’s group medical insurance policy is insufficient. Medical costs are skyrocketing, making health insurance a must-have. A health insurance policy covers expenses such as pre-and post-hospitalization, in-patient treatment, daycare treatments, donor expenses, domiciliary hospitalization, and so on.
You have the upper hand on taxes – Purchasing health insurance coverage is one of the finest ways to take advantage of tax breaks under Section 80 D of the Income Tax Act of 1961. Currently, you can claim a maximum tax exemption of one lakh rupees.
There are ways to save in terms of taxes over your medical insurance – we bet this article walked you through that procedure.