Tax benefit in health insurance Under Section 80D
A health insurance plan has become a necessity in today's age when diseases and illnesses have become rampant. The medical expenses are so high that they give a common middle-class man a run for his money. A health plan, by meeting the medical costs, provides the much-needed relief from the financial strain which a medical emergency brings. Besides being a financial reliever, did you know that a health insurance plan saves your taxes too?
Yes, if the coverage benefits were not reason enough, the tax-saving angle might further motivate you to invest in a health insurance plan. Do you know the tax benefit which you can get from a health plan? Let's find out:
As per the regulation of Section 80D of the Income Tax Act, the premiums paid for a health insurance plan are exempted from your taxable income. There is a maximum limit on the exemption amount available. This limit depends on age and the members covered. The maximum exemption which you can avail is Rs.60, 000. Let's understand how:
• List of Tax Exemption on Health Insurance:
|If you buy an individual health insurance plan for yourself or a family floater plan covering yourself, your spouse and dependent children
||You get a maximum exemption of Rs.25,000
|If you are senior citizen (above 60 years of age) and you cover yourself and your family
||The exemption limit increases and you get a maximum exemption of Rs.30, 000
|If you are not a senior citizen and you cover yourself, your family and your parents who are also not senior citizens
||You get a maximum exemption of Rs.25, 000 for yourself and your family and an additional exemption of Rs.25, 000 for buying a plan for your parents. Thus, your total exemption limit becomes Rs.50, 000
|If you are not a senior citizen yourself but your parents are senior citizens and you buy a health plan for yourself, your family and your parents
||You get a maximum exemption of Rs.25, 000 for yourself and your family. The additional exemption for parents would increase to Rs.30, 000 since they are senior citizens. Thus, your total exemption limit becomes Rs.55, 000
|If you are a senior citizen, your parents are senior citizens and you buy a plan for yourself, your family and your parents
||You get a maximum exemption of Rs.30, 000 for yourself and your family. Another additional exemption of Rs.30, 000 would be allowed for health insurance of senior citizen parents. Thus, your total exemption limit would become Rs.60,000
So, if you invest in a health insurance policy, you can reduce your taxable income by up to Rs.60, 000. Isn't this a sweet deal?