Do you consider health insurance in your tax-saving planning? Think again
Hectic schedules and sedentary lifestyles have brought a slew of lifestyle ailments into our lives. The deterioration of your health resulting from them, combined with increased healthcare costs, can deplete your funds. Given this, acquiring the best health insurance in India must be at the top of your investing priority list. According to IRS standards, if you want to take advantage of tax benefits, you should invest in medical insurance. That is why purchasing medical insurance or personal accident insurance for yourself and your family. It may help keep not only medical expenses at bay but also avoid financial and tax liabilities.
Every financial adviser will tell you that the first step in financial planning is finding good health insurance coverage and personal accident insurance. To meet your financial objectives, you should begin saving as soon as possible, and purchasing a health insurance plan could help you save money through tax deductions.
Here’s all you need to know regarding health insurance and the tax benefits that come with it:
The amount of protection you require
Whether it’s a minor surgery or a life-saving procedure. Rising healthcare costs may result in a hefty bill making it all the more vital to select a high sum insured.
Coverage for the entire family
If you have a large family with many dependents, a family floater plan that covers everyone. Instead of individual health policies for each member may be more cost-effective.
Senior citizen’s health insurance
Suppose you have parents or in-laws who are financially reliant on you; rather than enrolling them in your family floater plan, you might want to explore getting a separate senior citizen’s health insurance coverage for them. Doing this guarantees that they are covered adequately for all age-related ailments, which may be more costly than others. You can then have the rest of the family covered in another family floater plan, ensuring that everyone is adequately protected.
Increase your coverage by purchasing a super top-up health insurance policy
The best health insurance in India also provides additional coverage. In a super top-up for when your current health insurance plan’s coverage limit has been exhausted. It can be a lifesaver in the event of an unexpected medical emergency, as it prevents you from having to dive into your funds or take out a loan to cover costs. This policy can also be used as a floater to cover all of your dependents.
Section 80D deductions
You can claim up to Rs. 25,000 in tax deductions for health insurance for yourself, your spouse, and your dependent children under Section 80D of the Income Tax Act. And if your parents are below 60 years of age, you can also claim an additional deduction of up to Rs. 25,000 on their health insurance. If you buy a health insurance policy for your senior citizen parents, you can claim a deduction of up to Rs. 50,000. And if you and your parents are over 60, you can claim a maximum deduction of Rs. 1 lakh.
If you pay the premium in one lump sum for a policy that has been in force for at least a year. You are eligible for a deduction equal to a specified fraction of the amount. This amount is computed by multiplying the total premium paid by the number of years the insurance has been in effect. As previously stated, this is subject to the existing deduction limit.
Preventive health check-up deduction
You can claim tax deductions on money spent on preventive health check-ups, up to a limit of Rs. 5,000. These deductions can be claimed for yourself, your spouse, your children under the age of 18, or your parents.
Essential Points to Keep in Mind
- Examine your policy’s tax exemptions carefully.
- If you get health insurance or personal accident insurance for yourself or your parents and both of you are senior citizens. The maximum deduction under section 80D is Rs. 1,00,000.
- This deduction is also available to HUFs for premiums paid to insure the health of any HUF member.
- The premium must be paid in any way other than cash to qualify for the deduction. On the other hand, Preventive Health Checkups can be paid in cash.
- Section 80D benefits are in addition to the Section 80C tax benefits of up to Rs. 1.5 lakh.
- Medical expenses can be deducted from the amount allocated for senior citizens’ deductions.
- When you pay your health insurance premium all at once. You get tax benefits for the number of years you have coverage.
With health care coverage from the best health insurance in India you can get tax benefits. Upon the premiums you pay for health insurance by Section 80D of the Income Tax Act, in addition to protecting your finances from medical bills. As a result, health insurance coverage can be a useful tax-planning tool and a prudent investment for your future.