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Ref. No. KLI/22-23/E-BB/492
Health insurance premium qualifies for tax deduction under Section 80D of the Income Tax Act. Here's all you need to know about tax saving on health insurance.
There are various reasons ranging from a comprehensive health check-up to an unannounced emergency for which one may have to pay medical bills. Naturally, you will choose the best facilities for your loved ones at such times. When it comes to being prudent about your family and reducing their financial burden, a health insurance plan is what you should consider. You can buy health insurance and pay premiums not just for yourself but also for your spouse, children, and parents.
Buying health insurance may feel like a hole dug in your pocket; however, health insurance premium under section 80D of the Income Tax Act, 1961, makes it less of a burden by helping you save taxes. All health policies ranging from indemnity plans; that pay for the actual medical expenses to fixed benefit-based plans are tax saving health insurance plans. As a result, you can get a health insurance rebate in income tax on the premiums paid for you, your spouse, and your parents.
Health insurance rebate in income tax essentially means that the premiums you must pay every month; quarter or year will be reduced from your taxable income. Another noteworthy fact is that this tax deduction is not only for individuals, but the members of HUF (Hindu undivided family) are also eligible. While health insurance under 80D allows tax deductions, they come with certain limits up to which one can claim health insurance rebate in income tax.
Apart from just health insurance, one can also claim deductions for term insurance riders that are purchased. Term insurance premiums are eligible for tax deduction under 80C of the Income Tax Act; however, any additional health rider, such as a critical illness rider or an accidental benefit rider, can be claimed as health insurance under 80D.
While understanding the technicalities of tax deduction under 80D, it is also essential to keep in mind that all these deductions make health insurance more affordable. It encourages you to get health covers to protect you and your family from any financial burden. So, buy a health plan and be physically and emotionally present with your family in the time of need and stand strong together.
Ref. No. KLI/22-23/E-BB/2435