A hectic, stress-filled lifestyle can cause a variety of health issues, be it something as common as diabetes or something big like cancer. But, no matter how big or small the medical issue is, it still needs treatment. This means you need to change your lifestyle and maintain a healthy diet along with the regular intake of your medications. Also, medical costs and hospitalization is not cheap either. Here’s where health insurance comes in. If you or your loved one is suffering from an illness or disease the last thing you need is more stress, which is exactly what expensive medication can give you. Having a health insurance has lots of other benefits and the primary one is that you can get a tax deduction when you have a medical insurance plan.
Every individual or HUF can claim a deduction under section 80D for the premiums paid by them for a medical insurance from their total income.
How Much Deduction Is Available?
For an individual, the maximum deduction amount available is Rs. 25,000 for a family insurance plan, which includes self, spouse, and dependent children. If you have an insurance plan for dependent parents, you can claim an additional amount of Rs. 25,000 if they’re under 60. If they’re older than 60, you can claim a deduction of Rs. 50,000. And if the taxpayer and the parent are above 60, the deduction amount available is Rs. 100,000.
For an HUF, any family member can claim the deduction, which is Rs. 25,000 if the insured is less than 60 years old and Rs. 50,000 if the insured is above 60.
If you take any preventive checkups during the term of your health insurance, you can claim a deduction of Rs. 5000 which is included in the maximum limit of Rs. 25,000.
Single Premium Scheme
As of 2018, the government has introduced a new scheme for people who have a single premium plan. If the taxpayer has paid a yearly lumpsum payment for a health insurance plan which is valid for more than a year, the taxpayer can claim a deduction of an amount of the fraction of the premium paid. The fraction is calculated by dividing the premium paid by the number of years of the policy. But, the deduction is still subject to a maximum limit of Rs. 25,000.
Let’s understand tax deduction better with the help of an example.
Mr. A pays a medical insurance premium of Rs. 20,000 for himself and his wife for 2018-2019. And he also got a health checkup of Rs. 5000. So, Mr. X can claim a maximum deduction of Rs 25,000 under Section 80D of the Income Tax Act. For this, Rs 20,000 is for the insurance premium paid, and Rs 5000 is for a health checkup. The overall deduction amount is limited to Rs. 20,000, so if the premium paid would have been more (say, Rs. 22,000), the deduction for the health checkup would have been only Rs. 3000, despite the cost of it being Rs. 5000.
Tax deduction is just one of the benefits of getting a health insurance. It protects your and your loved ones in time of need and allows them to get the kind of care they deserve without worrying about the cost of the treatment. An illness can strike at anytime and being prepared for any eventuality is always good. Therefore, it is a good idea to start searching for health insurance plans online or offline.
WittyPen | Generated on Tue, Apr 30, 2019 12:57 PM