Health Insurance Tax Benefit – Here Is What You Need To Know
Most of the reputed financial planners suggest their customers opt for the appropriate health insurance plans when it comes to securing overall financial condition. Health insurance is the first and foremost step for every financial preparation. Adequate health insurance coverage is pivotal for everyone to secure monetary background of self and family. Keeping the inflating medical cost in mind, it is very important to have health insurance. If you don’t have proper coverage, all the laborious saving may go in vain and finally wiped out in the flood of expenses. Hence, leading to a major financial crisis! However, apart from medical coverage, health insurance has several benefits.
Discerning the benefits
Holding health insurance plans is a great way to save you from hefty taxes. The premium paid in the medical insurance plan fetches an efficient health cover along with saving taxes. It’s simple if you show reduced yearly taxable income; you’ll lessen the chances of tax liability. Therefore, it’s not just a cost incurred but also a way of translating good savings into your account through immense tax benefits. If you fall under the tax liability, a health insurance policy is the best way to curb the burden. It is not that you are eligible enough but also helps in claiming the income tax exemption to an extent. When purchasing a policy for your parents, makes sure that it offers sufficient coverage.
Health insurance & tax benefits under section 80D
Tax benefits: The tax benefit of health insurance plans depend on the insured person’s age and family members. In the case of senior citizens, the maximum limit is Rs. 30,000 and the other family members who are below the age of 60, the limit is Rs. 25,000.
Preventive health checkups: With the maximum limit category of Rs. 25,000 and Rs. 30,000 (depending on the age) you can avail incredible tax benefits for preventive health checkups in the same year that reaches up to the amount of Rs. 5000. This is the reason; many hospitals offer preventive health checkup packages to improve your health status.
Cash payment: To reap the benefits of tax, the codes and standards of income tax stipulate that the premium of the plans must be paid through any (individually preferred) mode of payment, except cash. It can be done through credit cards, debit cards, net banking and many. However, as per the expert, cash payment should always be avoided when it comes to paying the premiums.
The premium is the maximum tax deduction: The final amount of tax deduction from the overall yearly income is the total amount of premium from the health insurance coverage subtracting prevalent charges of service taxes and others. Moreover, if the medical expenses reach to Rs. 5000, it can be added to the premium to avail the tax deduction.
Whatever be the plan you choose for, be sure to consult your needs and preferences with the professionals to live a wonderful tax saving life in the future.