Understand the Tax Benefits of Health Insurance Policy

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Medical bills are a matter of concern these days. When we fall sick and need the support of healthcare, we also somewhere get bothered because of the medical bills that are going to shoot up. This is why we must make it a point to buy a health insurancepolicy at the earliest. When we plan to buy a health insurance policy, we mostly think of using it when we are hospitalized. What we do not realize is the health insurance tax benefit that we can avail. This is one of the benefits that we can actually get from health insurance policies. 

In order to incentivize health insurance and the several benefits that come along with it, under Section 80D of the Income Tax Act and the Financial Act of 2018, a tax concession is offered as you pay the health insurance premiums. Let us now shed some limelight on the tax benefits that you as a policyholder can claim with your health insurance plan.

Tax deduction against payment of premium 

Section 80D of the Income Tax Act enables the policyholders of health insurance to claim a tax deduction for the payment of premiums under their health insurance policies. Under this option, not only the policyholder can avail of the tax deduction on the health insurance policy but also their spouse and children.However, you need to be aware of the fact that you can enjoy this benefit only when you pay the premiums via any means but cash.

Deductions for senior citizens

Under the Financial Act of 2018, a much better tax benefit can be enjoyed for the premiums that have been paid for senior citizens. This means if your parents are more than 60 years old, they will be able to claim a tax benefit of INR 60,000. In addition to this, they will also be able to enjoy a benefit amount of INR 25,000 for the number of premiums that have been paid for the health insurance policies which provide coverage to them, their spouse, and their children. Therefore, they can make a claim of tax benefit if INR 75,000.

Tax benefit for the oldest member in the family

You can avail of tax benefits for the premiums that you pay against the health insurance policy of the eldest family member.However, the age of the eldest member of the family has to be 60 years and above, then only the policyholder will be able to file a tax benefit amount that can be of up to INR 50,000. If both of your parents are above 60 years of age, you can claim INR 1 lakh in a year.

Tax benefit for members of the family

If there is no senior citizen in your family who has a health insurance plan, you will still be able to enjoy the tax benefit of INR 25,000 in a year.

Additional rewards

Tax benefits for health insurance policies are available with an additional reward wherein you will be able to use the tax benefits that you have got for your parents over the age of 60 years, so as to clear your medical costs. Apart from this, you pay the premiums of the health insurance policy at once, you can enjoy tax benefits for the entire policy term.

These are some of the types of tax benefits that you can enjoy on payment of premiums for health insurance policies. You also need to know that the tax benefits under section 80D of the Income Tax Act are in addition to the tax break of 80C for INR 1,50,000. If you wish to know more about the tax benefits that can be availed for a health insurance policy, you can visit the website of IIFL.

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