Health Insurance Ranked Amongst The Best Tax Saving Option?
Everyone is aware of the benefits of comprehensive health insurance. It’s the best mode to ensure comprehensive financial coverage covering all your medical & hospitalization costs during your journey.
However, did you know that health insurance ranks amongst the best tax saving option?
If you’re surprised and weren’t aware about this open your eyes to this amazing fact. In this article you will learn in more detail as to how one can use health insurance to save tax?
Read on to know some useful tips to benefit from huge tax exemptions.
Get tax exemption as per Income Tax Act
- Health insurance in India provides financial assistance to the millions of people. It protects people against huge, rising medical as well as hospitalization costs. Perhaps, health insurance is one of the best tax saving options.
- People with low health related risk factors can get additional tax benefits by purchasing health insurance.
- As per Section 80D of the Income Tax Act, the premium amount paid for health policy is exempted from tax. Hence, you don’t have to pay tax for the premium amount which is deductible.
What’s the criteria to get tax benefits from health insurance?
All individuals and HUF (Hindu Undivided Families) members are liable to receive tax benefits as per Section 80D of income tax act. You receive a benefit of deduction up to Rs.15, 000 from the taxable amount. Therefore, if you, your spouse and your children have individual health insurance policies then the total deductible amount will be Rs. 45,000/-. Hence, you receive greater tax benefits.
On the other hand, parents above 60 years of age, get additional benefit of tax deduction of Rs. 20,000/- per year. Therefore, a person when crosses 60 years of age will receive total tax benefit of Rs.35, 000 by investing in these policies.
Get extra tax exemption of Rs.20, 000!
Many people tend to neglect to invest in parent’s healthcare insurance policy. Surprisingly, many people are unaware of an added tax benefit of health insurance. When a person invests in health care insurance for parents, he/she receives Rs. 20,000 extra deduction as tax benefit. Also from a monetary perspective, it’s better as along with providing an added benefit, it covers all the parental medical costs.
However there are certain limitations which are-
- Premium to be paid only in the form of cash.
- People who are investors across several corporate health plans can’t benefit from the above deductions.
- To get the benefits, you’ll be required using a payroll deduction mechanism or online electronic modes to pay the premiums.
Health insurance fulfils 2 important motives
People search for tax saving instruments within India to save tax. Health insurance policies of India fulfil 2 important motives. It provides significant tax benefit as well as provides a sufficient health cover for individuals and his entire family. Hence, health insurance is one of the best tax saving instruments of India plus a great health care option too!