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Tax Benefits related to Health Insurance you need to know

Posted by Royal Sundaram on 14 Jan 2019

Tax-Benefits-related-to-Health-Insurance-you-need-to-know
The increase in number of lifestyle diseases and rising health costs has made it necessary for people to buy a health insurance. You can get yourself and your family, including spouse, children, and parents covered under a health insurance plan. Health insurance policy acts as an umbrella coverage by helping you pay for the medical expenses in case of hospitalization due to any illness or injury. Other than providing protection against medical expenses, it also offers tax benefits on the premiums paid towards your health insurance under Section 80D of the Income Tax Act, 1961. Health insurance offers tax benefits as an added advantage. Here’s a brief explanation of the deductions available as per the Income Tax Act, 1961 –

  • * Under Section 80D: If a person is covered by a plan that offers health insurance for family, which includes you, your spouse, your parents as well as your dependent children, then he/she can avail a tax exemption of up to 25,000. And if somebody is taking a health insurance for parents, who are senior citizens, then they can claim a deduction of Rs. 30,000.
  • * Under Section 80DD: If you have paid health insurance premium for a handicapped dependent relative, then you can claim a deduction of up to Rs. 75,000 as per section 80DD of the Income Tax Act.
  • * Under section 80DDB: Under section 80DDB, you can claim deduction on health expenses incurred by you on the treatment of your relative suffering from health issues such as chronic renal failure, haematological disorders, malignant cancers, AIDS, dementia, thalassemia, dementia, and other neurological disorders. In such scenario, one can claim a tax deduction of up to Rs. 40,000.
  • * Under section 80U: Under section 80U of the Income Tax Act, any person who suffers from disability (not less than 40%) is eligible for tax deduction of up to Rs. 75,000. The maximum tax liability in case of severe disability is Rs. 1,25,000.

On the whole, being covered under health insurance helps you lower your tax liability. Therefore, you will have to agree that investing in health insurance is a smart choice, both in the terms of safety and tax advantages. Besides, if you are looking to buy health insurance policy online, then go for Royal Sundaram.

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