Income Deductions Under Section 80 D
When it is tax saving season, everyone is usually running helter-skelter looking for the best tax saving plans that will also serve as investments that provide returns or either health or medical insurance. Section 80D of The Income Tax Act also enlists such avenues that can be availed for saving tax. Sadly, there are many misconceptions about the Income Tax Section 80D and many people think medical insurance is merely a direct tax saving tool.
In fact, owing to financial illiteracy, many people consider tax saving and tax evasion as one and the same. While evading taxes is a crime, saving income tax using the various tools that are available. These include a maximum deduction of Rs.25,000 per year on health insurance premium for self and family and a maximum deduction of Rs.30,000 per year if you are a senior citizen. For Parents, a maximum deduction of Rs.25,000 per year can be claimed on health insurance premium paid on behalf of parents and a section 80d limit of Rs.30,000 per year can be availed on premium payments for senior citizen parents.
Additional Deductions include a deduction of Rs. 5,000 can be claimed every year on expenses related to health check-ups. This limit includes the check-up expenses of all members in a family, including spouse, kids and parents.
There are also certain exemptions deduction under section 80d such as any sum that is received under a life insurance policy, including the sum allocated by way of bonus on traditional insurance policies are considered exempt from tax structure in India. However, this rule is not applicable to sum received under Section 80DD (3), or a sum received under a Keyman Insurance Policy, or any sum received other than as death benefit under an insurance policy which has been issued on or after April 1 2003 and if the premium payable in any of the years during the term of the policy does not exceed 20% of the sum assured.
A health insurance policy is a shield that protects you and your family from the financial loss at the time of hospitalization during a medical emergency. It’s a way to ensure that the insurer bears the treatment cost of the best medical assistance that is available. A health insurance policy offers the cashless facility to you at various leading hospital networks nationwide, that offer you cashless treatment.
It also includes ambulance charges incurred in case you come across an unfortunate event like a medical emergency are covered by your health insurance policy. A health insurance policy also provides coverage for certain pre-existing conditions and Pre and Post Hospitalization expenses that occur when you come across a medical emergency. A health insurance policy takes care of these expenses.
Investing in a health insurance policy for yourself and your family will safeguard you against unforeseen hospitalization expenses and also help reduce your taxable income to a great extent. With the rising medical costs and healthcare expenses, insuring yourself and your family is essential.
To learn more about the income tax slabs AY 18-19, click here.
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