Medical expenses have skyrocketed in the last few years. As a result, health insurance has become mandatory. Without insurance, most people cannot get treatment at good private hospitals. Insurance brings the obvious benefit of protection. But it also offers another benefit: tax savings. Medical insurance is one of the prime tax-saving investment options under Section 80D in 2017.
What is Section 80D?
Section 80D of the Indian Income Tax Act of 1961 has provisions for tax deductions on health insurance. You may buy health plans for your family members or yourself. The premiums will be eligible for tax deductions under this section. These deductions are exclusive of the tax benefits you get from Section 80C. Claim anything between Rs 25,000 to Rs 65,000 under this section.
If you have dependent parents, the deductions go up. This is because Section 80D has additional provisions for senior citizens. If you yourself are a senior citizen who has dependent senior citizen parents, your tax deductions will be even higher. We speak about these benefits in detail below.
Health Insurance Premiums
You can buy a health plan for yourself, your spouse, your children, and your parents (if you pay for your siblings, you won’t be able to get any tax benefit, though). Section 80D gives a tax benefit on the premiums you pay towards these plans. These benefits are:
- Self, spouse, and kids: Rs 25,000
- Self, spouse, kids, and parents: Rs 55,000
- Self, spouse, kids, and senior citizen parents: Rs 60,000
- Senior citizen self, spouse, kids, and senior citizen parents: Rs 65,000
If you have a health plan for yourself and your family members, submit the documents when you do your taxes. You can enjoy some hefty deductions, as mentioned above. Many people do not know about these benefits and so end up without these deductions even after they buy health plans. Make sure you do not make the same mistake.
Preventive Health Check-up
Section 80D also has some tax-saving options for preventive health checks. If you or a family member has undergone a preventive health check-up, you can get an extra rebate of Rs 5,000. Why has the government done this? It hopes to encourage people to get themselves checked from time to time. Early diagnosis and prevention can, of course, save your life. They can also save you a whole lot of money in treatment costs.
Let us understand this with the help of an example. Satish went for a preventative health check and he was diagnosed with high blood sugar, not amounting to diabetes. He started his medication and altered his diet and never did he require treatment for diabetes which would have been a more expensive affair. This is why preventive health checks are encouraged.
Section 80D For Senior Citizens
It is difficult for senior citizens to get health insurance. Few insurance providers want to sell policies to seniors. That is because they have a higher chance of making claims. The plans that are available are expensive too. Keeping this in mind, the government has kept more provisions in Section 80D to help senior citizens. They are now eligible for a tax deduction of Rs 25,000. Every senior citizen (people above 80) will get a deduction of Rs 30,000.
The Bottom Line
As you can see, Section 80D of the Indian Income Tax Act is beneficial for anyone looking to save tax. Health is an important factor. You must do everything you can to ensure you and your loved ones remain at your healthiest best. Now, you can even enjoy some useful tax benefits by protecting your health. So, make the most of the tax-saving investment options under Section 80D. Plan well and make the maximum tax savings.