It is undeniable that India has a very low penetration rate for health insurance due to a lack of services, infrastructure, and knowledge.
The cost of the health insurance plan premium is not subject to taxes. By lowering your taxable income or tax obligation, you have the ability to save more money. Let’s clarify in more detail:
Motives to purchase health insurance
These days, purchasing health insurance is absolutely necessary. Some of the explanations for why you should think about purchasing health insurance are listed below:
Financial protection against expensive medical care
When a medical emergency occurs, a staggering percentage of Indians lose money. Most families wind up spending a significant amount of their savings because of the exorbitant cost of health care. When you are completely dependent on your money to cover unforeseen costs, having health insurance plans for family is useful.
Section 80D of the Indian Income Tax Act allows for a tax exemption on health insurance premium payments. Even for one’s spouse, children, or parents, one can claim up to Rs. 25,000 in reimbursement for health insurance premiums paid up until the age of 60. The highest amount of tax relief that can be claimed if they are paying the senior citizen premium is Rs. 30,000. **
|Tax Benefit under Section 80C of IT ACT**
|When the premium is paid for parents who are below 60 years of age and the age of the individual paying premiums is less than 60 years
|When the premium is paid for the parents who are above the age of 60 years and the age of the individual paying premiums is below 60 years
|If the age of the individual paying the premium is more than 60 years and the parents whose age is also above 60 years
Tax advantages for paying for health insurance:
- The maximum tax benefit claimed for health insurance premiums
The cost of health insurance premiums is not deductible from taxes, per the Indian Income Tax Act. According to Section 80D of the Income Tax Act, an individual may claim tax benefits on the premiums paid for his or her spouse, parents, and/or children, regardless of whether they are considered to be dependents or not, up to a specific maximum. **
- Medical Examinations
When paying for health insurance premiums, a maximum of Rs. 25000–30000 can be deducted, getting preventative health checks entitles one to an extra tax break of up to Rs. 5,000. **
- Premium contributed to life insurance providers
One who wants to take advantage of tax benefits is not limited to purchasing health insurance from general insurance companies. Consequently, life insurers also offer health insurance. The IT ACT permits tax exemption for premiums paid for critical illness or other health insurance riders under a life insurance policy. **
- Payment in Cash and Tax
Experts advise against paying the premium in cash in order to receive tax benefits, nevertheless. To be eligible for the tax benefits, you can pay using credit cards, net banking, checks, or draughts. **
- Parental plans that are separate
You can get separate health insurance for your parents to maximise the tax advantages. This is particularly advised if one parent is under 80 and the other is above 80. **
A health insurance plan is useful to reduce the unplanned costs when medical costs are skyrocketing, and one hospital stay can cost you an arm and a leg. But health insurance is always accompanied by tax advantages that help the person save money. Purchase health insurance while considering the requirements and analysing the cost of unforeseen possibilities because it is never too late. ##
* Standard T&C Apply
** Currently, there are 2 tax regimes in India – new and old. To get the tax benefit you desire, choose the correct one after consulting an expert. You can opt for a regime change during the next financial year.
# Visit the official website of IRDAI for further details.
## All savings are provided by the insurer as per the IRDAI-approved insurance plan. Standard T&C apply
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.