Everything about Tax Saving Health Insurance Policies

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Nobody is planning to get sick or hurt, but it is important for people that they avail medical care. Health insurance basically covers medical costs as well as offers various other benefits such as saving taxes. With the rising costs of medical care, it is important for people to buy insurance or medical coverage.

BENEFITS OF TAX SAVING HEALTH INSURANCE

It is possible to save income tax by investing your money in health insurance. Tax saving is an important aspect of financial planning. There are various benefits of investing the money in the tax-saving health insurance policies. These are as follows:

1. Investing in tax saving health insurance helps to meet the various financial goals when the need arises particularly a medical emergency.

2. It helps in saving income tax annually.

3. It provides safety during a medical emergency as it covers all the costs of the medical treatment when an unfortunate thing happens.

4. The other benefits of tax-saving health insurance include tax benefits, cashless hospitalization facility, domiciliary treatment expenses, ambulance charges, etc.

5. It provides appropriate coverage against critical illnesses. It covers life-threatening illnesses like kidney failure, stroke, etc.

HOW CAN WE SAVE TAX ON HEALTH INSURANCE

There are various ways by which income tax can be saved on health insurance. Under section 80D of the Income Tax Act, there are norms that help to avail the exemption from income tax which are based on premiums that are paid on health insurance policies that have been purchased for the family and parents as well.

A tax deduction of up to Rs. 25,000 can be availed annually. This is subject to the premium paid for the policy. The coverage under the tax-saving health insurance can be availed by your family(including you, spouse, dependent children)

The tax benefits on the senior citizen health insurance policies will be increased to Rs. 50,000 if you or your spouse's age is more than 60 years.

• The Preventive Health Checkups

Savings on income tax can be availed based on the expenses on the preventive health check-ups during the term of the insurance. The tax exemption is of Rs. 25,000 if below 60 years of age and Rs. 30,000 for the senior citizens. An additional benefit of up to 5,000 rupees can be covered against preventive health check-ups each year.

• Policy for the Parents

An additional tax-saving benefit can be claimed if the premium is paid for the health coverage that can be of avail by your parents. You can avail a tax deduction of up to Rs. 50,000 every year.

• There will be no Tax Benefit on the payment of Cash

The premium should be paid by the bank modes such as demand draft, cheque, debit or debit cards, or net banking so as to avail the tax benefits. On the other hand, savings can be made on income tax based on the expenses made for preventive health check-ups payment for which is made in cash.

Must Read: Tax Saving Investments: Save your taxes beyond Mutual Fund