Tax season is here!

Let’s have a look at how your health insurance policy can help you save more on taxes.

Why do you need health insurance in the first place?

Getting a good medical cover is the most important thing so that you don't have to exhaust your savings to pay hospital bills later. But you should check on the various parameters before you choose a policy for yourself.

Why do you need medical cover even if your employer provides you one?

Your corporate policy usually offers limited coverage. Make sure you buy a separate policy for you and your family. A good family floater plan can build a strong protection. 

Think of it, if you were to switch jobs, your corporate medical policy won't be ported.

Plus, you are not eligible to claim tax deductions under 80C as your employer is paying your health insurance premium.

What is Section 80D?

Section 80D allows individuals and Hindu Undivided Families (HUFs) to claim a deduction for medical insurance premiums paid in a financial year. This deduction is available over and above the Rs 1.5 lakh limit under Section 80C. To claim this deduction, the payment must be made in any mode other than cash.

Who is Eligible for Deduction Under Section 80D?

Individuals and HUFs can claim a deduction under Section 80D. The deduction is available for medical insurance premiums paid for- Self, Spouse, Dependent children and Parents. 

Things to note before buying a health insurance for claiming 80D deductions:

• Medical insurance premium paid for your brother/ sister/ or any other relative cannot be claimed as a deduction for tax benefit

• Group health insurance policy provided by your corporate workplace will not be considered eligible for deduction

• You cannot claim tax benefits on behalf of premium paid for working children

• Premium paid by cash is not deductible

• In case of part payment by you and a parent, both of you can claim a deduction to the extent paid by each

• The deduction must be taken without showing the service tax and cess portion from the premium amount

• You cannot claim a deduction if you choose to pay tax under the new tax regime.

How much deduction can HUFs claim under 80D? 

HUFs can claim Rs. 25,000 for members age under 60 and Rs. 50,000 for members age: above 60

How to claim a deduction under section 80D?

Salaried individuals can claim deduction under section 80D by submitting insurance premium receipts or medical bills to your employer or while filing your ITR.

Self-employed individuals are not asked to claim deduction while filing ITR, but it is good to retain the receipts paid towards insurance premium in your tax file.

Deduction on preventive health checkups:

You can claim a maximum of up to Rs. 5,000 deduction on preventive health checkup in a given financial year.

Is term insurance premium also deductible under 80D?

Term insurance tax benefits can be availed under 80D only if you have opted for health related riders like critical illness cover, surgical care cover, etc. 

Conclusion: If you have not yet got yourself a separate health insurance policy, it's high time you get one. It will help you a lot in saving taxes and most importantly in letting you sleep peacefully knowing that you are covered. Book a free consultation call with Finnovate to select the right health insurance plan. We will compare various plans and suggest the right one for you so that you have a hassle-free experience.