In India, we are still unable to overcome the fear of Coronavirus, and now there are confirmed cases of dengue and malaria across the country. This information comes from the Program for Monitoring Emerging Diseases (ProMED), which is part of the International Society for Infectious Diseases (ISID).
In these trying times, you should take every measure to ensure the safety of yourself and your loved ones. One of the most significant ways of doing this is investing in a health insurance policy. It will not only financially cover you during medical emergencies but it can also be a part of your financial planning—especially because it offers tax benefits.
Financial planning with health insurance
Mediclaim has many benefits, making it a must-have aspect of your family’s financial planning strategy.
Firstly, it offers tax exemptions, which will effectively reduce your tax liability. Secondly, the policy ensures that you are protected in times of medical emergencies, so you need not worry about building a contingency fund for unexpected treatments. Thirdly, as you grow older and retire, you will probably make more frequent visits to the hospital. Health cover will help meet these expenses when they arise.
Tax benefits of health insurance
You can avail of tax benefits from your health insurance plans under Section 80D of the Income Tax Act, 1961 for yourself as well as your family members.
You can get a tax deduction up to INR 25,000 on the premium paid towards the policy for yourself, your spouse, and your child.
- Individual with parents under the age of 60
If you have health cover for the aforementioned family members along with your dependent parents, who are under the age of 60, you can avail of an additional deduction up to INR 25,000. Your total deduction can be up to INR 50,000.
- Individual with parents above the age of 60
If you buy health cover for a dependent parent over the age of 60, you can get health insurance tax benefits of up to INR 50,000. If you also have a self-policy, the total benefit will be up to INR 75,000.
- Individual over 60 with parents above the age of 60
If you are a senior citizen and have health policies for both yourself and your parents, you can claim tax deduction up to INR 50,000 on each policy. The total deduction eligibility is up to INR 1 lakh.
How to claim tax exemption
You can visit the nearest income tax office and fill the tax filing form. Remember to mention the deductions under section 80D. You will need to provide supporting documents that prove your claim.
If you are filing for tax online, you will need to fill in the relevant tax exemptions sections. You will need to upload the necessary documents of proof before submitting the form.
Apart from safeguarding you from heavy hospitalization-related costs, you can also save tax on health insurance policies. So, you should begin your journey of smart tax-saving today!