Health insurance is crucial and a must-have for everyone. At the rate at which health expenditure is soaring, it is almost critical to go for an adequate mediclaim policy for yourself and your family. The absence of a health insurance plan is likely to blow all your hard-earned savings, especially in case of a critical illness, hospitalization or accidents in the family. Thus, a comprehensive medical coverage safeguards both you and your family’s health in the wake of unforeseen circumstances.
Health insurance is viewed as a significant investment and therefore tax deductions are offered u/s 80D of the Income Tax Act, 1961. Under this section, deductions are provided on the policies for self, spouse, dependent children and parents. Section 80D of the Income Tax Act, 1961 allows for deduction of money towards health insurance and assumes great significance in tax planning and personal finance.
Mediclaim Policy is synonymous with health insurance and safeguards you and your family against financial risks arising out of a medical emergency. In such a case, the medical expenditure is borne by the insurer.
One can avail tax deduction u/s 80D of the Income Tax Act, 1961 in case you have paid a premium on the health insurance policy taken for the following:
Four types of deductions can be claimed u/s 80D. These include:
Under Section 80D of Income Tax Act, 1961 an individual or HUF can avail deduction for payment of health insurance premiums &preventive health care expenses for self, spouse, dependent children and parents. The maximum deduction for AY 2020-21 is as follows:
Section 80D has been bifurcated into two more sections for specific insurance requirements.
You can avail a tax benefit of up to INR 75,000 basis the expenses incurred for nursing, training or rehabilitation of a dependent with disability. In case of an extreme situation, the benefit goes up to INR 1,25,000. In either of the cases, a supporting medical certificate has to be submitted as proof.
In a scenario where medical expenses have been incurred on critical ailments (cancer, chronic renal failure, Parkinson’s disease etc.), a maximum deduction 40,000/- or the amount actually paid, whichever is less. In the case of a senior citizen and super-senior citizen, Rs.1, 00,000 or amount actually paid, whichever is less. It is mandatory to attach a medical certificate while filing income tax.
In today’s day and age, it isn’t uncommon to fall prey to health hazards. This makes it pertinent to have an evolved health insurance plan, so you can prevent payment of hefty medical bills in case of an injury. In a scenario you don’t have enough cash for a medical treatment, you might have to apply for a loan. This is why a health insurance policy comes in handy and acts as the saviour. As they say, invest your money in the right plan and of course, the right time!
(Republished with Amendments)