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Health Insurance For Different Tax Brackets
Sep 6, 2022

Section 80D – Health Insurance for Different Tax Brackets

In today’s day and age, health threats are increasing relentlessly. Planning your life without any backup can mean an invitation to financial troubles, especially when it comes to health contingencies. These situations of medical exigencies can drain your hard-earned savings, in addition to paving the way for a debt trap. To be prepared for these uncalled situations in life, it is best to invest in a robust health insurance cover. When you buy a health insurance plan, other than the financial shield, it offers a deduction for any premiums paid in your income tax return. Thus, health insurance policies have dual advantages of financial protection and availing deductions in income tax returns. Note: The Finance Ministry introduced an optional tax regime in the Budget of 2020, where taxpayers, since then, have had an option of opting for a lower tax slab. This new regime does not allow certain deductions and exemptions that are otherwise available in the existing tax structure. Therefore, if you want to take the tax benefit of the premiums paid, you need to continue opting for the existing tax structure. Here are the deductions based on the existing structure that is available for different tax brackets based on their age group. For Taxpayers Less than 60 years:
Income Slabs Income Tax Rate Deduction under section 80D
Up to ₹2,50,000 Nil ₹25,000
₹2,50,001 to ₹5,00,000 5% above ₹2,50,000 ₹25,000
₹5,00,001 to ₹10,00,000 ₹12,500 + 20% above ₹5,00,000 ₹25,000
Above ₹10,00,000 ₹1,12,500 + 30% above ₹10,00,000 ₹25,000
*Standard T&C Apply For Taxpayers Above 60 years:
Income Slabs Income Tax Rate Deduction under section 80D
Up to ₹3,00,000 Nil ₹50,000
₹3,00,001 to ₹5,00,000 5% above ₹3,00,000 ₹50,000
₹5,00,001 to ₹10,00,000 ₹10,000 + 20% above ₹5,00,000 ₹50,000
Above ₹10,00,000 ₹1,10,000 + 30% above ₹10,00,000 ₹50,000
*Standard T&C Apply For Taxpayers Above 80 years:
Income Slabs Income Tax Rate Deduction under section 80D
Up to ₹5,00,000 Nil ₹50,000
₹5,00,001 to ₹10,00,000 20% above ₹5,00,000 ₹50,000
Above ₹10,00,000 ₹1,00,000 + 30% above ₹10,00,000 ₹50,000
*Standard T&C Apply Disclaimer: Remember that tax benefit is subject to change in tax laws  
  • From the above tables, it is evident that the amount of deduction does not increase or decrease with changes in tax brackets.
  • Instead, it increases based on the age of the beneficiary insured within the policy.
The following table can help you compute the right amount of deduction, depending on for whom the health insurance policy is purchased:  
Category   The premium for and maximum deduction available Aggregate deduction as per Section 80D
Policyholder, spouse, and children Parents, whether dependent or not
All beneficiaries not classified as senior citizens Up to ₹ 25,000 Up to ₹ 25,000 ₹ 50,000
Policyholder, spouse, and children are below 60 years whereas parents are over the age of 60 years Up to ₹ 25,000 Up to ₹ 50,000 ₹ 75,000
Either the policyholder or their spouse is a senior citizen and parents are also senior citizens Up to ₹ 50,000 Up to ₹ 50,000 ₹ 1,00,000
*Standard T&C Apply Disclaimer: Remember that tax benefit is subject to change in tax laws Wrapping it Up Whether you are buying an individual policy, looking at health insurance plans for family, or even health insurance for senior citizens, keep in mind that the maximum amount of deduction available will be based on the age of the beneficiary insured and not on the income levels of the taxpayer. Now that it is clear that the tax brackets do not affect the amount of deduction, it is best to seek robust insurance coverage for yourself and your family considering the growing health complications. You can explore the different plans offered by Bajaj Allianz General Insurance Company to opt for a financial shield. 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.

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