Investing in health insurance plans can be one of the best ways to save money on income tax. Before investing in a health insurance policy plan, you need to consider certain essential factors.
Tax savings can help you do proper financial planning. Moreover, doing it the right way can serve two purposes, some of the most common ones include the following:
Meet your financial goal easily, and save money on income tax.
A health insurance plan is one of the best options available in the market, helping you save money. It protects you against financial emergencies and will cover almost all medical treatment costs, especially in unfortunate events. Some of the common benefits of health insurance policy plans are cashless hospitalization, income tax saving, treatment coverage, and more.
What is Section 80D?
Section 80D stands for the income tax act that offers dedications against medical expenditures for self or family. The amount can usually be up to Rs 50,000. The tax deductions are made on medical insurance. It offers a wide range of exemptions to help you save a significant amount of money.
Who is eligible for tax benefits under section 80D?
As per section 80D, the taxpayers can consider claiming the deductions for a wide range of benefits. The health insurance premium is paid for the following members of the family:
- Self
- Spouse
- Parents
- Children
As per the act, the Hindu Undivided Families have the flexibility to claim these dedications. The premium paid can further be subjected to the upper limit to claim deductions.
Saving tax on health insurance premium payment
As a policyholder, you will need to pay the premium annually. According to the policy rules, the coverage immediate family members can avail the policy. Moreover, there are benefits for senior citizens as well.
Some of the common ways to save tax on the health insurance policy payment include the following:
Preventive health checkups
Depending on the policy’s term, you can save significantly upon the income tax. The tax exemption limit is around Rs 25,000 for people below 60 years. However, as per Section 80D of the Income Tax Act 1961, the tax exemption for senior citizens is Rs 30,000. Furthermore, the policyholders can claim an extra benefit of preventive health checkup coverage upto Rs 5,000.
No tax benefit for cash payment
The premium can be deposited using different banking payments if you want to get the tax benefits. Nonetheless, depending on the mode through which you’re making the payment, you can get additional benefits.
Health insurance policy for parents
If you are paying the premium charges for your parents, you can claim the tax-saving benefits according to Section 80D. This will make you eligible for a tax deduction benefit of up to Rs 50,000. Therefore, you can save the amount for any of your parents aged above 60 years.
Aditya Birla Group has comprehensive health insurance plans to help you save money. You need to claim it if you are starting and don’t know the perks. We can help you understand each plan’s benefits and assist you in claiming your deductions.
