Healthcare costs are increasing day by day, making it crucial for you to buy a health insurance policy for yourself and your loved ones. Whether you are old or young, a mediclaim policy is necessary to protect you and your family from the increasing health care costs. The government encourages people to invest in a mediclaim policy; these policies allow people to claim tax benefits on health insurance premiums. In this blog, you will learn about claiming tax benefits on the premium paid regarding health insurance plans.
If you didn’t know it earlier, you get tax benefits for health insurance when you pay the premium on the health insurance plan. These tax benefits help you in saving money and enjoy the perks of health insurance, all at the same time.
Before moving on to how to claim health insurance tax credit, let’s first discuss a bit about the tax benefits.
Tax Benefits on Health Insurance Plans
The Income Tax Act, 1961, Section 80D, gives citizens and Hindu Undivided Family the leeway to avail tax benefits health insurance on the premium that they pay. If your annual income falls under the tax liability bracket, you can easily buy a mediclaim policy and claim tax deductions for the premium that you are liable to pay. You can easily buy a family health insurance plan from Future Generali at the most affordable health insurance premium.
Moreover, it is essential for people to know that a health insurance plan is not just meant for aged people. It is an equally important investment for young people also. With so many diseases taking a toll on people’s health, such as diabetes, high BP, cholesterol, etc., it becomes necessary to buy online health insurance as early and as soon as possible. Also, with tax benefits on health insurance plans, you can claim tax deductions under the IT Act, Section 80D.
Undoubtedly, the primary aim is to protect yourself and your family with these plans, but they have an incredible additional benefit of tax deduction that you can avail.
What is Section 80D Under the IT Act?
Each citizen and HUF are entitled to claim a deduction from their income for health insurance plans. These deductions are on the premium paid and are available for critical illnesses and top-up plans for health.
Moreover, the deduction benefit is available for both individual health insurance policy and family health insurance plans; the family plan covers your spouse, dependent parents, and children(if you have any)
Advantages of Claiming Tax Deduction on Health Insurance Policy
A few benefits of claiming tax deductions on health insurance plan are
- Increases the take-home salary for all salaried individuals
- Saves you money
- You can claim a tax benefit of Rs.1 lakh.
The health insurance benefits for senior citizens on health insurance premium include the following
- They can claim tax exemption of up to Rs.5,000 on PHC( Preventive Health Check-Ups) for each financial year.
- Also, there is the benefit of claiming an exemption on taxes of up to Rs.50,000 for each financial year.
How to Claim Tax Benefits on Premium-Paid?
You can claim tax benefits on the mediclaim policy when you file the Income Tax Return(ITR) for the respective financial year. We’ll provide you with a step-by-step guide on how to claim health insurance tax credit. Also, how to claim 80d deduction will be covered under this? The steps include
- While filing your Income Tax Return, provided under the ‘Deductions’ column, you can choose the 80D section to claim deductions on tax regarding medical insurance premiums.
- Next, you must select the criteria under which you want to claim the tax deduction. The various criteria that you have the option of choosing from are
- Family and self
- Self (60 years and higher) and family
- Parents above the age of 60 years
- Family, parents, and self
- Family, parents, and self above the age of 60 years
- Family, parents, and self-, all above the age of 60 years
- You need to attach the documents supporting the criteria mentioned above.
Note: You must know that tax benefits can be claimed only if you pay the premium through credit or debit cards, net banking, cheque, or demand drafts. Payment of the premium, made in cash, will not be eligible for tax benefits.
Now that we’ve discussed how to claim health insurance tax credit, it is essential to even know the eligibility for the same. So, let’s delve into that next.
Eligibility Criteria to Claim Tax Deductions on Health Plan
The eligibility to claim deductions on tax on the mediclaim policies under the Income Tax Act, Section 80D, is as follows
- Individuals who are policyholders for health insurance plans for themselves, spouses, children, or dependent parents.
- Member of a HUF, Hindu Undivided Family
The tax deductions depending on age include the following
- Family and self below 60 years of age: Rs.25,000
- Family, parents, and self all under the age of 60: Rs.50,000
- Senior citizen parents, family and self(under 60 years of age): Rs.75,000
- Senior citizen parents, family and self(eldest member is 60 plus): Rs.1,00,000
Health insurance plans are a necessity these days more than a want. They are incredibly beneficial as you can avail significant tax benefits for the premiums that you pay. It is essential that you understand your needs well and, after that, decide if you want to include the family members, such as dependent parents, to avail the maximum benefits on tax exemption.
Also, you must ensure that while claiming tax exemptions while filing the ITR, you take maximum benefit and shouldn’t miss out on the same. Furthermore, applying for a health insurance plan is easy, depending on whether you want an individual health plan or a family floater health plan.