Towards the end of every financial year, there’s a rush to compute taxes and leverage the most out of tax-saving investments, financial instruments and schemes. While there are a number of investments that offer tax benefits, few of them offer the utility of health insurance, which also tends to get overlooked as a way to save on taxes. Health insurance plans not only help you protect your family in case of future uncertainties and guarantee affordable treatment amidst rising inflation, but also allow you to seek tax deductions for the premium paid.
As per Section 80 D of Indian Income Tax (IT) Act, 1961, deduction on health insurance premium paid for self, spouse, parents, children and dependents, can be claimed. However, factors such as annual income and the age of the insured person decide the amount of deduction.
Section 80 D Eligibility and Terms
- A deduction of up to Rs. 25,000 on health insurance premium can be availed for self, spouse and children.
- For parents lower than age of 60, additional deduction of maximum Rs. 25,000 can be claimed.
- In case the parents are above the age of 60, the deduction amount is Rs. 50,000. So, a maximum of Rs. 75,000 can be claimed in this case if parents as well as self/ spouse/ kids are insured.
- If the taxpayer as well as parents both are senior citizens (above 60 years of age) then up to Rs. 1 Lakhs in deduction can be claimed.
- Further Rs. 5,000 can be claimed in lieu of annual health check-ups. So, if you or your family member went for a health check-up through the health insurance plans, it’s eligible for an additional Rs. 5000 tax deduction.
Health Insurance Salient Features
With a plethora of health insurance plans available in the market, it’s recommended to buy one that provides comprehensive coverage along with other benefits and offers. If your current health insurance plan is on the verge of expiry, you can check other available plans so as to avail the best deal at an affordable price. These are some of the striking features that you should check for while buying health insurance plans:
- Cashless Mediclaim: This is important to avoid the last-minute hassle of arranging cash in case of emergency
- Network Hospitals: A long list of network hospitals so that you can select the hospital in advance and as per your convenience, again to avoid any last-hour rush or anxiety
- Wide Coverage: Look for health insurance plans with maximum coverage
- Affordable Price: Cost is also an important constraint. You can check whether the price is competitive or not
- Customer Helpline: In case you require any help regarding the policy, there should be a dedicated 24-hour helpline
- Quick Claim Settlement: Hassle-free and smooth claim processing and disbursal is an important criterion
- Claim Settlement Ratio: It’s the ratio of number of claims settled against those filed
Section 80 D of Indian IT Act makes one eligible to seek deductions in case of health insurance plans. The amount is subject to age and other factors such as income and premium amount paid. You can find out the health insurance coverage amount on a health insurance calculator that’s available on the website of most insurance providers. Buy health insurance plans and boost your family’s protection against diseases.