All You Need To Know About Tax Benefits Under Health Insurance Plans

We can’t plan to get sick or catch a disease, but we can definitely plan how to combat such a situation without financial distress. Medical emergencies can often result in financial drain. Increasing healthcare costs are a source of concern, and health insurance's function in mitigating the financial effect of these costs is critical. Health and surgical costs are covered by a basic health insurance policy, according to the terms and conditions of the policy.

All You Need To Know About Tax Benefits Under Health Insurance Plans

A tax credit is given on the premium charged for a health insurance policy to encourage and popularise health insurance, which is a major cost-saver in the event of health problems. Health insurance premiums are tax deductible under section 80D of the Internal Revenue Code. This portion allows for a tax deduction for health insurance for the self, partner, and children. To distribute the insurance benefits and take advantage of tax benefits, one should even include one's parents in the scheme. Only when the premium is charged by a method other than cash is this tax deduction available.

This article will show you how to save money on taxes based on your parents' health insurance premiums.

Benefits under Section 80D of the Income Tax Act

There are five relevant things to remember about the tax value of health insurance policies, according to income tax laws for the fiscal year 2018-19.

• You can claim a tax deduction for premiums charged for health care for your parents under Section 80D of the Income Tax Act, regardless of whether or not your parents are financially dependent on you.
• If your parents are senior citizens (60 years or more) and you are under 60 years old, you can claim a tax gain of up to Rs. 80,000 (including preventive health checkups annually) under Section 80D of the Income Tax Act based on the premium payment paid by you for their health insurance.
• If you are 60 years old or older and still pay the premium for one of your parents' health insurance policies (both of whom must be senior citizens), you could be eligible for a tax exemption of up to Rs. 1,00,000.
• The Income Tax Act also allows you to claim a tax deduction of up to Rs.5000 for preventive health checkups for your parents over the age of 60.
• You could be eligible for tax benefits of up to Rs. 1,000,000 if you are 60 years old or older and you take care of your parents' preventive health checkups who are 80 years old or older.

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Conclusion

Purchasing health insurance is not a financial investment; rather, it is a shield that protects you from a variety of unforeseen incidents. Often think about the coverage and benefits of your parents' health insurance policy. Any fee charged for a health insurance policy, on the other hand, aids in tax savings. As a result, when purchasing a health insurance policy for your parents, make sure to keep all of the above tips in mind.

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.