Health insurance is something which every person should invest in. It is not just a mere investment. The health insurance looks after the financial part when one is ill and makes sure that there are no hassles faced by the family at critical times. Apart from this benefit, getting health insurance also ensures greater tax benefits for you.
What are these tax benefits?
According to the Income Tax under Section 80D, the insurance premium is deducted from the total income. Total income here equates to the gross total income which takes into account income from all heads. The taxable income is the gross total income minus the deductions under sections 80D and 80U.
As per the section 80D, an individual or Hindu Undivided family member can claim deduction for:
- The non cash payment of medical / health insurance premium paid by the tax payer.
- The individual tax payer can contribute to central government health scheme.
- The amount paid by the individual tax payer for preventive health check up.
- The expenses incurred for preserving the good health of a senior citizen or insurance for the person concerned.
The deduction can be claimed by the individual, wife, dependant parents or children in aggregate of the whole amount paid which does not exceed Rs 25000 to Rs 30000. In case of a Hindu Undivided Family, anyone from the family can claim the deduction.
As per section 80DD, the individual or HUF will have costs of medical expenditure (nursing, rehabilitation, etc.) taken up by the company in case of any disability and the deduction in this case will be INR 1, 25, 000.
As per section 80DDB, deductions go up to INR Rs 40,000 if medical expenditure is incurred on a relative or the self. Senior citizens can claim up to Rs 60,000 and older senior citizens can claim up to Rs 80,000.
As per section 80U, persons who have physical disabilities like blindness or deafness and mental illnesses, can claim deduction up to Rs 75,000 and people with even more severe physical disabilities can claim deductions up to Rs 1, 25,000.
Thus it can be seen that there are several sections under the income tax act which help individuals claim different types of health insurance for themselves and their families. Health insurance works as a safety net in addition to offering ample tax benefits and financial relief.
Learn More: Why is It Critical to Get Health Insurance?