Who Receives the Health Insurance Tax Benefit Under Section 80D?
Health insurance is perhaps the most important insurance policies that you must have in your insurance portfolio. The working of health insurance is simple, you pay a regular premium to the insurance company, and in return, the insurer agrees to provide financial compensation in the event of any medical emergency. But, there is more to a health insurance plan than just getting compensation for the expenses incurred on medical treatment. A health insurance plan is one the best tax-saving tool; the tax benefits of health insurance is covered under Section 80D of the Income Tax Act.
As per the Section 80D, the premium you pay towards the health insurance premium is considered a deductible from your taxable income. The maximum deduction you can get is ₹ 25,000, and with effect from April 1, 2018, the limit can extend up to ₹ 50,000 if you have purchased a policy for your dependent parents who are aged more than 60 years. Thus, it enables you to enjoy a maximum deduction of ₹ 75,000 from your total taxable income.
Let’s understand more about the tax benefits on health insurance and who can receive it?
Deduction for Super Senior Citizens
If both or one of the parents is a super-senior citizen (people who are aged more than 80 years), then you claim a tax deduction of ₹30,000 for expenses incurred towards medical treatment of the parents.
Deduction for treatment for specific illness under Section 80DB
As per Section 80DB, you can claim a maximum tax deduction up to ₹ 60,000 for senior citizens and for super-senior citizens, the limit is extended to ₹ 80,000) in a financial year for expenses incurred on treatment of certain specified diseases like cancer, chronic renal failure, etc. While claiming for the tax deduction, you must attach a proof of medical documents and an endorsement statement from a medical expert.
Deduction for treatment of a disabled dependent under Section 80DD
If you have any dependent disabled family member, you can claim a tax benefit on the expenses incurred for their medical treatment, nursing expenses, and rehabilitation. The maximum benefit you can claim is ₹ 75,000. In case, the disability is severe or extreme, the limit is extended up to ₹ 1.25 lakhs. The dependent family member can be parents, siblings, spouse, or children. To claim the tax benefit, you must submit a medical certificate.
Deduction for Medical Allowance Under Section 17
The amount compensated by your employer (from your salary) for treatment of your illness is subject to deduction from the total income tax payable. You can get a maximum deduction of ₹ 15,000 in a financial year.
There are many health insurance tax benefits that you can avail, but getting a tax deduction should not be the only reason to buy a health insurance policy. You must purchase health insurance mainly to protect yourself and your family from the financial hardships that you may suffer in the event of any unfortunate medical emergency.