Taxes are certain in your life, especially the Income Tax. While the Income Tax Act of India has classified taxes into multiple sections, the section 80D allows you to save thousands annually on your health insurance premium. If you have a health insurance policy that covers medical expenses of your family member (spouse and children) and you, you can save up to Rs. 25,000 per annum. Likewise, the premium paid for your health coverage availed by your parent also enables you to save more, i.e. up to Rs. 30,000.
This article will help you to know all legitimate facts related to the Section 80D of Income Tax Act, 1961, which will further help you to avail tax deductions for the health insurance premium. If you pay the health insurance premium for your spouse, children, and parents, then are eligible to avail the tax deduction under section 80D of Income Tax Act, 1961.
Considering the skyrocketing medical expenses, the Section 80D norms are often revised of the Income Tax department. Before mentioning the ways to avail the tax deduction, let us explore some important benefits (in terms of coverage) offered by a health insurance policy:
Benefits of Health Insurance under Section 80D of Income Tax Act
A health insurance policy is a shield that protects you and your family from the financial loss at the time of hospitalization during a medical emergency. Itâ€™s your insurer that bears the treatment cost and ensures that you avail the best medical assistance. Read below the benefits of health insurance:
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A health insurance policy offers the cashless facility to you at various multi specialty hospitals nationwide, which offer you cashless treatment. These empanelled hospitals referred to as network hospitals of the insurance company.
The ambulance expenses incurred in case you come across an unfortunate event like a medical emergency are covered by your health insurance policy. Generally, these policies cover the complete or a share of the ambulance expense.
Apart from the treatment, you sometimes are asked to avail the domiciliary treatment like the ayurveda treatment, any special therapy, or unani treatment. Your health insurance policy also covers the cost incurred for such a domiciliary treatment subject to the policy norms.
Pre existing Disease
A health insurance policy also provides coverage for certain pre-existing conditions. It also means that the policy additionally covers expenses incurred for the treatment of a disease that existed before buying the policy. A waiting period of 2 to 4 years is applicable in such a case.
Pre and Post Hospitalization
Apart from certain hospitalization and ambulance expenses, there are several other expenses that occur when you come across a medical emergency. A health insurance policy takes care of these expenses. It covers both pre and post hospitalization expenses for a certain period of time. This duration is clearly mentioned in the policy wordings.
What is Tax Deduction?
Taxes are amongst the fundamental elements of India. They constitute a major part of the government income that is used to provide numerous facilities to Indian citizens. According to the Income Tax Act of India, if your income is above a certain amount, then you are required to pay the income tax. As these taxes affect your pocket and considering this fact, government offers provisions for the tax deduction. You can claim the tax deduction for several expenditures, such as your tuition fees, charitable contributions and medical expenses under different Income Tax sections.
According to Section 80D of Income Tax Act, you can avail tax deduction, based on the premium paid for a health insurance policy. You are eligible for the tax deduction whether the premium is paid for a health insurance policy that belongs to you, your spouse, children, or dependent parents. You can also claim the tax deduction for the cost incurred for preventive health checkups for your family.
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Under Section 80D of Income Tax Act, an individual can the claim deduction for the following medical expenses during the financial year:
- Medical insurance premium paid by you through any mode of payment other than cash.
- Expenses borne by you under any Central Government health schemes.
- Sum paid by you on account of preventive health checkups.
- Medical expenses incurred for the health of a super senior citizen.
Invest in a health insurance policy that offers you comprehensive coverage at an affordable premium and avail tax benefit under section 80 of ITA.