With the rising cost of healthcare around the world, it has become increasingly difficult to cover the expenses of treatment with just your savings. If you were to rely purely on your savings to cover the cost of hospitalisation, you would run out of money sooner rather than later and end up in a bad financial state. The smart choice is to purchase health insurance for you and your loved ones.
One of the benefits you can enjoy with this policy is tax deductions. What are these deductions and what is the eligibility criteria for them? Keep reading to find out more.
Health insurance premiums & Section 80D
is a non-life insurance policy that provides you with financial assistance for medical treatments. The coverage of your policy includes a sum insured amount that can be used to pay for the cost of hospitalisation. The amount of sum insured depends on the policy you purchase. Room rent, nurse charges, ambulance fees and daily allowance are the additional benefits provided in the policy. A health insurance premium calculator
can help to compare and get quotes for a policy that suits your needs. *
Section 80D in the Income Tax Act of 1961 allows you to avail of a tax deduction of the premium paid towards your medical insurance in your return on income. Additionally, preventive health check-up is also eligible for this deduction. Note that the deductions are subject to prevalent tax laws.
What are deductions under Section 80D?
The following are the 80D deductions
that you can avail:
|Deduction of Rs. 25,000 on premium payment
|If the age of the policyholder, their partner, and children is below the age of 60
|Deduction of Rs. 50,000 on premium payment
|Deduction of Rs. 25,000 for policyholder and their family below the age of 60, with an additional deduction of Rs. 25,000 for parents below the age of 60
|Deduction of Rs. 75,000 on premium payment
|Deduction of Rs. 25,000 for policyholder and their family below the age of 60, with an additional deduction of Rs. 50,000 for parents above the age of 60
|Deduction of Rs. 1 Lakh on premium payment
|If the age of the policyholder, their parents, their partner, and children is above 60
You can avail of an additional deduction of Rs.5000 on preventive health check-ups. This check-up is done to detect and diagnose any major ailments in your body at an early stage. Do keep in mind that this deduction is included in the overall deduction you can avail under Section 80D.
Who is eligible under this section?
The following are eligible for deductions under Section 80D:
- The policyholder, their spouse, their children, and their parents are eligible under the same health insurance coverage.
- All members of a Hindu Undivided Family (HUF).
What are the exclusions under this section?
The exclusions are as follows:
- If you are paying a premium for a policy that covers your siblings, grandparents, or other relatives, you cannot avail of deductions under this section.
- If you are paying a premium for children who are working, no deduction is available.
- Premium payment made in cash is ineligible.
- If you, your partner, your children, and your parents are covered under group insurance, a deduction cannot be availed.
*Standard T&C apply
Things to keep in mind
- Purchase health insurance at an early age to get it at a lower cost. Buying it at a later stage in life means paying more for it.
- Check the amount of sum insured offered under the policy. If it is insufficient, opt for a plan with a higher amount.
- Maintain transparency with your insurer and do not hide health conditions from them.
This is the eligibility criteria for Section 80D of the Income Tax Act. Do keep in mind that these deductions are subject to tax changes so you should keep an eye out for any updates from the government. Get the best health insurance plan in India by visiting your nearest insurance advisor.
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.
*Standard T&C apply