Health Insurance Providing Tax Benefits
Health insurance is an important aspect of life for some of the unexpected moments
that could land you in financial trouble, apart from having to go through health issues. Health policy lets you overcome the tough days that may arise all of a sudden, even as you keep yourself prepared for the rainy day through regular payment of premiums for health policy. However, there is more to health insurance than what meets the eye you get to save the amount that you would have otherwise spent on healthcare, and you also get to gain from tax benefit through tax saving associated with your investment in mediclaim.Save tax with premiums paid on health policy:
It is a form of incentive for people to invest in insurance and protect their interest as well as those of their families that the government has come up with tax plan to let investors save tax.
Tax Plan for individual health insurance: The tax plan associated with health insurance states that you could save as much as Rs. 15,000 on income tax when you pay premiums on mediclaim. Section 80D of the Income Tax Act specifies that you could save an amount not exceeding Rs. 15,000 when you invest in mediclaim in your own name or in the name of your spouse or those of your dependent children.
Tax plan for health insurance of parents: Its not just on the premium that you pay on health insurance of your spouse and dependent children that you could save tax on. If you invest on mediclaim for your parents, you would be eligible for tax benefit of a further Rs. 15,000 in annual premium paid on health insurance. This limit increases to Rs. 20,000, when you invest in mediclaim for your parents who are senior citizens. In effect, you could benefit from tax saving of as much as Rs. 30,000 when you have invested in health insurance for you yourself, your spouse or your dependent children on the one hand, and on the mediclaim of your parents on the other. The amount you save on income tax increases to Rs 35,000 if your parents were senior citizens.
Important considerations in terms of tax benefit from health policy:
You need to remember that your insurance premium that you use to save tax has to be of the same year as that of your taxable income. Further, the payments that you make for health policy have to be in full and not just part payments. For instance, if you were to pay part of the premiums on mediclaim, and if the remaining payments were to come from your parents, you may not achieve the tax saving that you could otherwise.
So, how would you benefit out of the tax plan?
The money that you invest in health policy works in many ways. One, it is an investment in your own financial future, since health insurance can help you tide over many a health condition without being traumatized by the financial strain associated with hospitalization. Further, with mediclaim, you get tax benefit under Section 80D of the Income Tax Act. Finally, with the tax saving that you realize on health insurance, you get the peace of mind at having included your parents into the protection of mediclaim, which makes you save tax even further. Your tax plan should take advantage of the savings on income tax that is designed into health insurance.
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