Availing Tax Benefits Under Section 80D On Health Insurance Premiums
Section 80D of the ITA 1961 provides a deduction for money spent on health insurance and health maintenance, which is…
Section 80D of the ITA 1961 provides a deduction for money spent on health insurance and health maintenance, which is essential for tax planning and personal finance.
What deductions are permitted under Section 80D?
- Money spent on a health insurance policy premium
- Money spent on family members’ healthcare, including parents
Options for saving money on health insurance
Health insurance plans are beneficial in terms of reimbursing medical expenses and as a tax-saving tool. Section 80D of the Income Tax Act of 1961 provides policyholders with a substantial tax deduction for health insurance premiums paid to purchase health insurance plans.
Every health insurance policy owned by the proposer, their spouse, children, or parents, is eligible for tax benefits. When purchasing health insurance for parents, however, look for higher tax benefits and coverage for the broadest range of medical conditions. This will aid in the selection of the most appropriate health insurance policy.
Different tax saving scenarios under section 80D for section 80d medical expenditure indicating eligibility and deduction for tax savings are mentioned below:
- You and your parents must be under the age of 60 –
Claims of up to Rs. 25,000 are permitted for self, family, and children. Additional claims of Rs. 25,000 are allowed against the premium paid for parents. The total sum is Rs. 50,000.
- You and your family are under 60, but your parents are over 60 –
Claim up to Rs. 25,000 against the premium paid for self, family, and children. A claim amount of Rs. 50,000 for the premium paid by parents. The total sum is Rs. 75,000.
- For your parents over 60 –
Claim up to Rs. 50,000 against the premium paid for yourself, your family, and your children. Furthermore, parents can claim up to Rs. 50,000 for premiums paid. The total amount is Rs. 100,000.
- HUF (hindu undivided family) –
A maximum of Rs. 25,000 (premium paid for self, family, and children) and Rs. 25,000 (parental premium) can be claimed. Total tax benefits for parents = Rs. 25,000, available only to senior citizens under senior citizen health insurance.
- Non-resident individual –
Claim amount of up to Rs. 25,000 for premium for self, family, and children. Parents are only eligible for tax breaks if they are over 65. As a result, the total amount is Rs. 25,000.
The following are a few considerations to keep in mind if you want to take advantage of tax breaks under Section 80D of the Income Tax Act of 1961 for health insurance plans:
- Read your health insurance policy’s tax exemption terms and conditions carefully.
- Avoid paying health insurance premiums in cash to take advantage of tax breaks.
- If you purchase a health insurance plan for yourself and your parents and are all senior citizens, you can claim the maximum deduction under Section 80D of Rs. 1 lakh.
- Section 80D benefits can be combined with Section 80C tax breaks of up to Rs. 1.5 lakh.
Overall, health insurance plans are undoubtedly one of the most effective ways to save taxes while protecting your savings from being spent on medical expenses. They also assist you in lowering your tax liability by allowing you to deduct up to Rs. 1 lakh from your taxable income under Section 80D of the ITA 1961. As a result, purchasing a health insurance policy as soon as possible is advised to have a healthy and secure future.
** Currently, there are 2 tax regimes in India – new and old. To get the tax benefit you desire, choose the correct one after consulting an expert. You can opt for a regime change during the next financial year.
## All savings are provided by the insurer as per the IRDAI-approved insurance plan. Standard T&C apply
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.