Now a days, people are becoming more and more aware about the health. The increased incidence of lifestyle related diseases have also increased the demand of the health insurance cover. The Income Tax Act, 1961 is also providing various deductions for the health insurance paid by the assessee for himself and for his family as our government is promoting it.
As per Income Tax Act “family means the assessee and family which includes spouse, children, parents and other dependents, covered under health insurance”.
There are various kind of insurance policies available in the markets and with various kind of facilities included in it. One has to pay fixed premium on it on yearly or half yearly basis, and at the time of medical emergency, one can avail the benefits in terms of financial worries , opting for health insurance can also offers tax benefits.
Various Deductions available under Income Tax Act
1. Under Section 80D:
• Deduction available for self, spouse and dependent children and exemption available up to Rs 25000.00
• Health insurance premium for senior citizen parents exemption available up to Rs. 30000.00
2. Under Section 80DD:
• Health insurance premium for handicapped dependent disability from 40% to 80% exemption can be availed up to Rs 75000.00
• In case of severe disability for handicapped dependent deduction up to Rs 125000.00
3. Under Section 80DDB:
• Under this section, one can claim deduction for the medical expenses done for relative suffering from specified chronic diseases like AIDS, cancer, etc.
• One can claim deduction for Rs. 40000.00
• In case of senior citizen, Deduction allowed is Rs. 60000.00
4. Under Section 80U:
• Under this section, any Indian citizen with disability more than 40% can claim deduction of Rs. 40000.00
• In case of severe disability, maximum tax limit is Rs. 125000.00
In a nutshell, we can say that health insurance policies not only prepares us for the unforeseen future but it also helps in the tax planning. So, one should invest in it.