Categorized | Health Insurance

tax benefits of health plans

The time when the financial season draws to an end is when employees generally run around frantically for investment options to save taxes. You must have already invested in the most commonly available investment plans and exhausted the common options available under Section 80C.  You are then looking for additional investment options that will help you in tax planning and can get you greater tax benefits.

Health plans are one of the best investment options that can give you these additional benefits. Under Section 80D of the Income Tax Act, you get tax benefits on the Premium that you pay for a Health Insurance policy. These were introduced by the government with the purpose of promoting health insurance in India that would benefit a large section of the population.
 
Health Insurance and Section 80D

Health has become very critical aspect these days as the spate of illnesses have gone up. Though remedies have been found for most illnesses, the costs are sky high and prohibitive for most families. It is in such critical situations that a health plan comes to your aid. It offers you Cashless Hospitalization in case you encounter with unforeseen medical emergency, illness, surgery or accident.

As per Section 80D of the Income Tax Act of India, premium paid by a person (non-senior citizen) upto Rs 15, 000 is exempt from taxable income. This is applicable for the mediclaim policy that you get for your immediate family. In addition, you can also get an additional Policy for your parents; you can then Claim an additional rebate of Rs 15,000. If your parents are senior citizens, you can get a rebate of Rs 20, 000. You can thus get a total tax discount of Rs 35, 000 from possessing health insurance policies.

Key Features of Health Insurance Schemes

There are a number of schemes offered by many companies that help tax savers to save taxes.
Here are some key features of these schemes:

•You can now get better offers from various companies with greater Coverage amount and the option of including more family members. For this you have to pay slightly higher premiums compared to what was available earlier.
 
•To claim Mediclaim benefits, a mediclaim receipt is a must as proof of payment of medical expenses.

•The medical expenses shouldn’t be paid as cash but by any other mode like online payment so that you can claim tax benefits.

•The insurance premium that you pay is deducted from your taxable income, thus reducing the tax you pay.

•To claim these facilities, you must be:

A.an individual tax payer,

B.member of a Hindu Undivided Family (HUF),

C.an Indian citizen and resident, or

D.an NRI.

A health plan is an investment from the emotional point of view more than from a financial point of view. You typically don’t put money into a health policy but pay for it. Thus, during a medical emergency, you have a good amount of money to take care of the expenses. Tax benefits on such a critical investment option will only add to your tax saving, peace of mind and emotional investment. Health insurance plans get deduction from taxable income as they are covered under Section 80D.