How to Save Tax with Health Insurance Policy?

health insurance policy for family

We all know that life is unpredictable. To meet an accident, we do not have to even go outside of our home; we can get an injury right at our home and end up hospitalized for days. Likewise, we can develop a disease at any age, and we do not have to be an old person for that. While so many things can happen to us, one of the painful things is to pay the high hospital bills. One solution for dealing with hospital bills is buying a health insurance policy.

Having health insurance means you do not have to worry about clearing the hospital bills even if you are hospitalized for several days. Either you will pay the bills from your pockets and get the reimbursement from the insurance company, or the insurance company and the hospital will settle the bill among them. In any case, you do not have to take the stress of paying hefty bills at the hospital. All you need to do is that, once you buy a health insurance policy, you have to keep paying the premiums without any break.

As we talk about the health insurance policies, we must know that there are several other advantages of one such policy apart from protection from high hospital bills. One of the advantages is the health insurance tax benefit. Do you want to know how? Here is an explanation for you.

Saving tax on health insurance premium payment

According to alphanewscall.com, As a health insurance policyholder, you will be able to enjoy a tax deduction of up to INR 25,000 yearly. However, it is subject to the premium you pay for your health insurance policy. The coverage that is provided by a health insurance policy can be availed by you, your spouse, and your children who are dependent on you. If your spouse is 60 years and above, the limit tax benefits on senior citizen health insurance policy can go up to INR 50,000. In this limit, you can also avail of the additional coverage of INR 5,000 for the health check-up costs of the family members which include your dependent children, spouse, and parents.

Health check-ups

During the policy term, you will be able to save on income tax for the expenses that took place because of preventive health check-ups. Under Section 80D of the Income Tax Act, 1961, if you are not 60 years old yet, the limit of tax exemption is INR 25,000. If you are above 60 years of age, the tax exemption would be INR 30,000. You will also be able to claim coverage against preventive health check-ups of up to INR 5,000, each year.

Health insurance policy for your parents

If you pay the premium for the health insurance policy which is availed by your parents, or even any one of them, you can avail of an additional tax benefit under Section 80D of Income Tax Act, 1961. You can enjoy a tax deduction of up to INR 50,000 each year. This clearly means you can save at least INR 50,000 for your parents who are above 60 years of age.

Tax benefits cannot be availed on cash payment

To avail of the tax benefits under a health insurance policy, you cannot make cash payments. For payment, you have to choose modes such as cheque, demand draft, net banking, or debit cards.

Therefore, we can now understand the various ways through which you can save taxes with your health insurance policy. Isn’t it great that you are getting coverage on your hospital bills and also saving taxes? If you want to know more about it, you can visit the website of IIFL.

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About the Author: Abhay Choubey

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