While most people understand how health plans work, many of them have queries when it comes to the tax deductions offered by these plans. Let us have a look at how health plans help you reduce your income tax burden-
1. Deductions Under Section 80DAs per Section 80D of the IT Act, premiums paid for health insurance is eligible for tax deductions of up to Rs. 25,000 in a financial year. Apart from a policy purchased for yourself, this deduction can also be claimed for policies purchased for your spouse and dependent children. However, the maximum limit remains the same.
So, even if you have a family floater plan or your family members have individual policies of their own whose premiums you pay, the deduction can only be up to Rs. 25,000.
2. Tax Deductions for Senior ParentsUntil 2018, health insurance premium deduction for a health plan purchased for someone above 60 was up to Rs. 30,000. But from 1st April 2018, this limit has been extended to up to Rs. 50,000 in a year. The deduction for seniors is over and above Rs. 25,000 limit for plans purchased for someone under 60 years.
So, if you are a policyholder under 60 years and have also purchased a health plan for parent/s above 60 years, you are eligible for tax deductions of up to Rs. 75,000. (Rs. 25,000+Rs. 50,000).
3. Tax deduction If You and Your Parent/s Are Above 60 YearsIf you are a policyholder above 60 years and have also purchased a policy for your senior parent/s, the tax deduction will be extended up to Rs. 1 lakh. This will include the maximum deduction limit of Rs. 50,000 for yourself as you are more than 60 years old and Rs. 50,000 for your senior parent/s.
Secure Your Life and Also Save Taxes Income tax health insurance deductionis highly beneficial and can help you considerably reduce your tax liabilities. But make sure that you do not end up purchasing a random policy due to last-minute tax-saving rush. Understand your insurance needs, compare the plans, and then select one that best suits your requirements.
Learn more about different Health Insurance Plans here.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
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