How To Save Tax Up to 1 Lakh With Health Insurance

How To Save Tax Up to 1 Lakh With Health Insurance
Take Away

In today’s time when everything around us is so uncertain that it becomes important to do the right financial planning like investing in a health insurance plan. A health insurance plan protects you and your loved ones in case any health emergency takes place. In addition to providing financial assistance during medical emergencies, health insurance also provides the benefit of tax savings. So, in this blog, let us understand how to save tax up to 1 lakh with health insurance.

There are tax exemptions available on health insurance premiums as per the different sections of the Income Tax Act, of 1961.

Saving Tax on Health Insurance Under Section 80D

As specified under section 80D of the Income Tax Act of 1961, policyholders can save tax of up to 1 lakh. The tax exemption is offered on the premium that is paid towards health insurance. The tax exemption can be availed on different types of health insurance plans such as senior citizen health insurance plans, family health insurance plans, and others. As per Section 80D of the Income Tax Act, an exemption of Rs. 25,000 is given. In the case of senior citizen health insurance plans, a tax exemption of Rs. 50,000 is provided. However, it is important to note that there is no tax benefit offered if the health insurance premium is paid through cash modes. Thus, you need to pay health insurance premiums through net banking, credit cards, UPI, or other digital modes.

Saving Tax on Health Insurance Under Section 80DDB

According to section 80DDB of the Income Tax Act, tax savings can be enjoyed in the treatment of specific diseases such as AIDS, cancer, Parkinson's disease, etc. For individuals below 60 years, a tax exemption of Rs. 40,000 is provided, and for senior citizens, a maximum tax exemption of Rs. 1,00,000 is given.

Saving Tax on Health Insurance Under Section 80DD

As per Section 80DD of the Income Tax Act of 1961, tax exemption is provided on all the medical expenses spent by the policyholder towards the treatment of his/her disabled dependent. A maximum tax deduction of up to Rs. 75,000 is given and if the policyholder’s dependent has 70% or above disability, then a tax deduction of Rs. 1.25 lakh is given.

Saving Tax on Health Insurance Under Section 80U

Section 80U of the Income Tax Act provides tax exemptions on the treatment of a disabled policyholder. For individuals with 40% disability, a tax exemption of Rs. 75,000 is provided, and for individuals with 80% or more disability, then a tax exemption of Rs. 1.5 lakh is given.