Every year before 31st March, many people do invest into Insurance and other financial instruments to save their taxes. Financial Instruments like 5 year FD, PPF, Mutual Funds and Policies, all are very important for asset creation as well as saving tax. However, Health insurance is the best choice for an individual. A health insurance will not only help you prepare financially for any medical emergency, but also reduce your tax burden. When there is health, there will be wealth.
Government has also supported the importance of health insurance purchase by laying out some exemption for tax savings u/s 80D of Income Tax Act. An individual can avail tax deduction of up to ₹25,000 for the premiums paid to buy a health plan for his family. Apart from this, he can also claim additional tax deduction for premiums paid towards the health plan of his dependent parents.
Rahul is a taxpayer and he has taken a family health plan for his wife and kid. For this he has paid an annual premium of ₹22,905 and ₹3,000 extra for a preventive health check-up.
Apart from this he has taken another health plan for his father who are aged 59 years and paid the premium of ₹33,393.
Total premium paid by Rahul is ₹52,473
So, tax claim breakdown for the year for Rahul:
| For Rahul’s family cover, including preventive health check-up (max. limit ₹25,000) | ₹25,000 |
| For Rahul’s father's health cover (max. limit ₹25,000) | ₹25,000 |
| Tax relief which can be claimed by Rahul | ₹50,000 |
Let’s look at this situation after two years:
Rahul’s father's age is now 61 years (he has become sr. citizen). His father's annual health premium is ₹47,103.
Rahul’s own family health cover premium is ₹26,793 and ₹3,000 extra for a preventive health check-up.
Total premium paid by Rahul is ₹73,896
So, tax claim breakdown for the year for Rahul:
| For Rahul’s family cover including preventive health check-up (max. limit ₹25,000) | ₹25,000 |
| For Rahul’s father's health cover (max. limit ₹50,000) | ₹47,103 |
| Tax relief which can be claimed by Rahul | ₹72,103 |
So, with proper planning, you claim tax deductions of upto ₹75,000/- with the help of health insurance. Along with tax savings you are also saving money for your medical emergencies.
*Standard Terms & Condition Apply. Premium discount is provided by insurer for a 3-year policy and 4 or above insured family members. CIBPL/Health/WebBanner/English/Dec-21/001