Health is the greatest asset for a human being. Since inflation has made medical bills costlier than ever, having a health insurance policy has its own perks, whatsoever. Investing in health insurance offers amazing returns on investment. You get coverage against expensive hospital bills that can wipe up your savings in one go. It ensures your financial stability when medical emergencies strike. Moreover, you are eligible to avail the tax deductions when you file your income tax returns.
In order to enjoy tax deductions along with health coverage, it is a pre-requisite that you pay the premium of your health insurance policy. On the other hand, if the premium of your health insurance is paid by your employer, you are not eligible to avail the tax deductions. There is no tax deduction on medical allowance paid by the employer to the employees of a company. Under the IT Act, 1961, medical allowance is not considered as an allowance, which is tax exempted.
Generally, medical allowance is confused with medical reimbursement. Medical reimbursement is paid by an employer to its employees when they submit a specific medical bill. As contrary to the medical allowance, medical reimbursement is tax saving.
Under Section 80D of the Income Tax Act, 1961, the deduction on the health insurance premium has been given to the assesses, the quantum of deduction are as under:
Republished with Amendments