Saving Duty on health insurance is a smart fiscal move that protects your well-being and also helps you to reduce your Tax liability.
Here’s how you Save tax on health insurance:
Understand Tax Deductions
In numerous countries, including the United States and India, premiums paid for health insurance are eligible for tax deductions. Understand the tax laws applicable in India for this benefit.
Section 80D of the Income Tax Act
Section 80D allows for deductions on premiums paid for health insurance policies. This benefit is available to individuals as well as Hindu concentrated Families( HUFs).
Please note that Partnership enterprises, trusts, companies or any other entity aren’t eligible to claim deductions under this section. Only payments made toward health insurance premiums and healthcare costs for elderly citizens are covered.
Under current tax laws, individuals can claim a deduction of upto ₹ 25,000 for premiums paid for themselves, their partner, and dependent children. Also, an additional deduction for parents upto ₹ 25,000 is allowed. However, the maximum deduction allowed is ₹ 50,000, If parents are elderly citizens ( age 60 or over).
Preventive Health Checkup:
You can claim an additional deduction of upto ₹ 5,000 for charges incurred towards preventative health check- ups for yourself, your partner, children, and parents under Section 80D. This is within the overall limit of ₹ 25,000 or ₹ 50,000, as applicable.
Payment Modes
To claim the deduction, the premium must be paid through modes other than cash. Payments made through cash aren’t eligible for Tax deductions.
Claiming the Deduction
You can claim this deduction while filing your Income Tax return. Make sure you have the necessary documents, such as Premium payment receipt, for verification.
Other Considerations
If you’re paying premiums for more than one health insurance policy, you can claim deductions for the total premium paid.
Make sure to keep a record of all premium payments and health check- up expenses to avoid any discrepancies during Income Tax filing.
It’s advisable to consult with a Tax advisor or financial expert to understand the specific rules and regulations applying to your situation.