With age, the likelihood of health risks rises. The premium for the elderly may be comparatively higher because the health insurance companies may view this as a liability. Additionally, older people may already have some health issues that could raise the cost of their insurance. For people over 60 who are experiencing financial hardship, Section 80D of the Income Act of 1961 allows for a tax deduction of up to Rs. 50,000/- to cover the cost of health insurance for the individual, the spouse, and any dependent children.
Health Insurance offers unwavering support when it comes to paying for medical expenses. Many people are aware of the numerous advantages that medical insurance offers, including coverage for hospitalisation, diagnoses, ambulances, etc. Only a small percentage of people are aware that health insurance allows for tax savings.
For paying the premium for individual health insurance plans or family health insurance plans, also known as floater policies that include oneself, one’s spouse, and dependent children, one may claim a tax deduction of up to Rs. 25,000/- per year. For those under the age of 60, this restriction applies.
Additionally, tax deductions are available for paying health insurance premiums for one’s parents. There is an additional tax deduction of Rs. 25,000 available if the parents are younger than 60. The total tax deduction available for paying the premium for family and parent medical insurance is therefore Rs. 50,000.
A crucial investment that everyone should make is health insurance. However, the issue that our nation is currently facing is that a large number of people do not view health insurance as a necessary investment. In addition to ignorance, this may be a result of a health insurance policy’s lack of concrete advantages. It does, however, eventually come in handy and can save your life.
The Indian government offers income tax deductions because it recognises the importance of health insurance and wants to encourage people to secure their lives with medical insurance. One may claim income tax deductions for the premium paid for a medical insurance policy under Section 80D of the Income Tax Act of 1961. This is done to increase health insurance penetration throughout the nation and to encourage the culture of purchasing health insurance for oneself and one’s family.
What way does this Section 80D provision help people save money? One can receive a tax deduction for the premium they pay for health insurance coverage if their annual income falls under the threshold for income tax liability, according to health experts from Star Health Insurance.
Due to the fact that Section 80D tax deductions can be claimed for each fiscal year, they encourage people to purchase and renew their health insurance plans. The premiums for rider plans, also known as top-up plans and critical illness plans, may also be paid with these deductions. It’s important to note that Group Mediclaim Policies (GMC) cannot take advantage of this tax benefit because the employer will be responsible for paying the premium.