What are the tax benefits of health insurance?

health insurance

The COVID-19 times have shown us a very tough time where many people lost their jobs and several of us have lost our loved ones. Hospitals have been charging high bills for treatments for COVID-19 patients. Although we cannot predict what may happen to us the next moment, we can at least take the necessary measures. One of the most important things that not many people talk about is buying a health insurance policy. The best thing about having a health insurance policy is that even if you do not have enough money to pay the hospital bills, it will be settled by the insurance company.

Apart from providing financial support especially in clearing the hospital bills, health insurance policies also provide tax benefits. Let us discuss the health insurance tax benefit today here.

The 2018 Amendment

Prior to 2018, the super senior citizens who are more than 80 years old were getting the tax deduction coverage under the Income Tax Act. However, the senior citizens who are above 60 years of age were not covered. Therefore, in the union budget 2018, Section 80D of the Income Tax Act was modified and a safety net for the senior citizens was also provided. This helped in increasing the limit of tax deductions that the senior citizens could claim against the medical expenses.  These tax deductions help in lessening the significance of the tax that is paid to the government of the country. As per the new amendment, the tax deductions that can be claimed were increased from INR 30,000 to INR50,000 yearly in the case of senior citizens. These tax deductions can be claimed by the senior citizens as well as their children.

Tax Benefits protected in the Amendment

The revised amendment is friendly to both the group f citizens and comes with an insurance cover. It also supports the citizens who cannot afford one. If you are already covered under a health insurance policy, you can claim around INR 25,000, especially if you have a family member who is dependent on you to INR 50,000 for senior citizens.

The family members of senior citizens who are not covered under a health insurance policy can claim quite a good tax deduction which can go up to INR 1 lakh.

Tax benefits that can be claimed under Section 80D of the Income Tax Act, 1961

For Individuals with No Insurance Cover

  • For yourself and the family: You can claim a tax deduction of up to INR 25,000 along with INR 5,000 for preventive health checkups. Therefore, it makes a total of INR 30,000.
  • For yourself, family, and parents: You will be able to claim up to INR 50,000 for deduction of tax along with INR 5,000 for health checkup exemption. therefore, the total benefit is up to INR 55,000 which you can claim.
  • For yourself, family, and senior citizen parents: The provisions of the Act enable a tax deduction of INR 75,000 along with INR 5,000 for preventative health checkups, especially if you have parents who are senior citizens. Therefore, you can expect a total benefit of INR 80,000.
  • For senior citizens, the family, and senior citizen parents: The Act enables you for a tax deduction of INR 1 lakh along with INR 5,000 for regular preventive health checkups. The total benefit that can be expected is INR 1.05 lakh yearly.

Now if you want to know more about the tax benefits of health insurance, you have to visit the IIFL website. you will not only find information about health insurance tax benefits but you can also come across a long list of health insurance policies that you can opt for. Check out as many health insurance policies as possible and choose the one that suits your needs.

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