Healthcare expenses in India are getting rather high and can push you into bankruptcy if you do not have a decent family or any other health insurance plan. Hence, you must purchase a proper healthcare plan. It will not only protect you from exorbitant medical expenses, but also reduce your tax liabilities. Under Section 80D of the Income Tax Act, you can avail certain tax benefits on your health insurance premiums.
However, you must choose a plan wisely if you want to claim all that it has to offer. Here is what you need to know about family health insurance plans and how they can help you save taxes.
Saving Taxes under Section 80D
Section 80D dictates that the health insurance policy instalments can be deducted from your taxable income. The primary factor that decides the deduction amount is age.
If you have a health insurance plan for dependent parents, you can get a tax exemption with an upper limit of Rs. 25,000 However, if your parents are more than 60 years old, the upper limit gets extended to Rs. 50,000.
In case both your parents are above 60 years and are under your health insurance plan, the upper limit can extend up to Rs. 1,00,000 (50,000 + 50,000).
There are several other types of schemes, each with its own benefits. You must fit the eligibility criteria to get them.
Types of Benefits under Section 80D
Under Section 80D, there are a variety of benefits for you and your family that can save you a sizeable amount from your income tax.
Health Insurance Plan on Preventive Check-Ups
You can receive coverage of up to Rs. 5,000 annually for undergoing preventive health check-ups. If you are below 60 years, the tax deduction limit is Rs. 25,000, while for 60 years and above, it is Rs. 30,000.
Health Insurance Plans for Dependent Parents
If you pay premiums for your parent’s health insurance plan, you can get a tax deduction of Rs. 50,000 if either of them is 60 years or above.
Health Insurance Plans for Dependent Parents Above 80 Years
If your parents are 80 years or older but are not covered under any health insurance scheme, you can avail of a tax deduction of up to Rs. 30,000 annually.
This can also get extended to Rs. 35,000 for undergoing preventive health check-ups along with any medical treatment.
Also Read: Aflac Medicare Supplement Review
Health Insurance Plans for Critical Diseases
In case of treatment of critical diseases, your family health insurance plan will fetch you Rs. 40,000 to Rs. 60,000 (60 years or above) and up to Rs. 80,000 (80 years or above).
Eligibility Criteria to Apply for Tax-saving Plans
The eligibility criteria for you to avail tax-saving under your family insurance plans are:
- If your parents are below 60 years of age, you can claim up to Rs. 25,000 for yourself, your spouse, and your kids.
- If your parents are above 60 years, you can claim Rs. 25,000 against the instalments paid for yourself, your spouse and your children. You can also claim up to Rs. 50,000 for the instalments paid for your parents’ plan.
- If both you and your parents are above 60 years, you can avail Rs. 50,000 against the instalments paid for yourself, your spouse and your children. Additionally, you can claim Rs. 50,000 for the instalments paid for your parents.
- If you are an NRI, you can claim Rs. 25,000 against your family’s instalments. You can only claim benefits for your parents’ instalments if they are 60 years or above.
- Hindu Undivided Family (HUF): If you fall under this category, you can claim Rs. 25,000 (below 60 years) or Rs. 50,000 (above 60 years) against the instalments paid for yourself, your spouse and children and the same additional Rs. 25,000 to Rs. 50,000 for your parent’s premium following the age rule.
Terms and Conditions for Tax-Saving against Health Insurance Plans
Every perk comes with its own set of limitations. Here are the conditions for tax-saving on your family health insurance plan:
- You cannot claim benefits if you fail to pay premiums within the financial year.
- You cannot pay the premiums using cash to avail tax-saving.
- You cannot claim any profit if someone else pays the instalments for you.
- No matter how much your annual instalments are, you can only claim the amount specified as per section 80D.
Lastly, before applying for any policy, you must carefully understand its terms and conditions. It could be one of the best ways to save your tax money.
Your family health insurance policy can save a considerable amount of your income tax if you follow all the above criteria and have suitable eligibility. So if you don’t already have one, you must apply now. In addition, you can also opt for cashless health insurance for added benefits. Under this insurance, you can receive medical treatment for no cost from a network hospital affiliated with your insurer.
Hi, I’m the Founder and Developer of Paramedics World, a blog truly devoted to Paramedics. I am a Medical Lab Tech, a Web Developer and Bibliophiliac. My greatest hobby is to teach and motivate other peoples to do whatever they wanna do in life.