The financial year is coming to an end, and it is time for tax declaration, and optimising your tax strategies. One such avenue is Section 80D of the Income Tax Act, which offers taxpayers the opportunity to save on taxes through health insurance plans. With the rising cost of healthcare, investing in a comprehensive health insurance policy not only provides financial protection against medical emergencies but also serves as a strategic tool for tax planning.
Understanding Section 80D of the Income Tax Act
Section 80D of the Income Tax Act, allows individuals to claim deductions on premiums paid towards health insurance policies. This section provides tax benefits to:
· Individuals
· Hindu Undivided Families (HUFs)
The deductions under this section are available for premiums paid for self, spouse, dependent children, and parents.
Benefits of buying a health insurance policy
Getting a health insurance policy offers a multitude of benefits, making it a prudent financial decision. Some of the key advantages include:
· Financial protection: It provides coverage against unforeseen medical expenses arising from illnesses, accidents, surgeries, hospitalisations, and more. It safeguards your finances by covering the costs of medical treatment, thereby preventing a significant financial burden.
· Access to quality healthcare: You gain access to a network of hospitals and healthcare providers empanelled with the insurance company. This ensures timely medical attention and quality healthcare services.
· Preventive care: Many health insurance plans offer coverage for preventive healthcare services such as regular health check-ups, vaccinations, and diagnostic tests. By promoting preventive care, these policies help in the early detection of illnesses and promote overall well-being.
Tax saving opportunities under Section 80D
Section 80D of the Income Tax Act provides taxpayers with significant opportunities for tax savings. The deductions available under this section are as follows:
For self, family, and dependent children: Taxpayers can claim deductions up to Rs. 25,000 for premiums paid towards health insurance policies covering themselves, their spouse, and dependent children. Additionally, an additional deduction of up to Rs. 25,000 is available for premiums paid towards health insurance for parents, subject to certain conditions.
For senior citizens: In cases where the policyholder or the insured individual is a senior citizen (aged 60 years or above), the maximum deduction limit for health insurance premiums increases to Rs. 50,000.
Preventive health check-up: Taxpayers can also claim deductions of up to Rs. 5,000 within the overall limit for expenses incurred towards preventive health check-ups for themselves, family members, or parents, irrespective of their age.
By leveraging the deductions available under Section 80D, taxpayers can reduce their taxable income and lower their tax liability.
It is essential to explore avenues for maximising tax savings while securing vital aspects such as health. Multiple online platforms provide health insurance options tailored for individuals, families, and senior citizens. Among them is the Bajaj Finance Insurance Mall, offering a range of plans in collaboration with leading insurance providers. You have the flexibility to pick the plan that best suits your needs, offering not only health coverage but also serving as an effective means to avail tax benefits.
Section 80D of the Income Tax Act serves as a valuable tool for achieving this dual objective by offering deductions on health insurance premiums. Investing in a robust health insurance policy not only provides financial protection against medical uncertainties but also offers significant tax benefits. By making informed decisions and availing of the tax-saving opportunities under Section 80D, individuals can safeguard their health and financial well-being effectively.
Source: https://www.moneycontrol.com/news/brand-connect/section-80d-of-income-tax-act-save-tax-through-health-insurance-plans-12255271.html
© 2018 CA Chandan Agarwal. All rights reserved.