By Rakesh Kaul, Chief Business Officer, SBI General Insurance
In the dynamic landscape of Indian healthcare, where costs continue to soar, securing robust health insurance isn't just prudent—it's essential for financial well-being. Beyond covering medical expenses, health insurance offers substantial tax benefits, providing individuals and families with opportunities to tax savings while safeguarding their health.
Central to unlocking tax benefits in health insurance is Section 80D of the Income Tax Act, in which an individual can save tax upto Rs. 75,000 per annum*. This provision allows individuals to claim deductions on health insurance premiums paid for themselves, their spouses, children, and dependent parents. Understanding deduction limits based on age and senior citizen status, along with maintaining proper documentation, can help taxpayers strategically leverage these deductions to enhance tax savings.
Critical illness insurance provides vital financial support by disbursing lump-sum payouts upon the diagnosis of specified severe illnesses. Premiums paid towards critical illness cover often qualify for tax exemptions under Section 80D, providing individuals with comprehensive protection against unforeseen health adversities.
The Indian government has also introduced tax deductions for expenses incurred on preventive health check-ups. Taxpayers can claim deductions for these expenses upto Rs. 5000 within the overall limit stipulated under Section 80D. Emphasizing the significance of preventive healthcare and elucidating associated tax benefits encourages individuals to prioritize regular health screenings, fortifying well-being while maximizing tax savings.
Many employers in India offer health insurance as part of their benefits package. Premiums paid by employers for employee health insurance typically qualify as non-taxable perquisites in the hands of employees. However, if any additional cover taken by employees for themselves, their spouses, children, and dependent parents with premium contributions made by them to group health insurance plans may merit tax deductions under Section 80D. Understanding the tax implications of employer-provided health insurance empowers employees to make informed decisions, optimizing both health and tax outcomes.
Family floater policies offer comprehensive protection for the entire family under a single umbrella, potentially yielding cost savings compared to individual plans. Premiums paid towards family floater policies qualify for deductions under Section 80D, making them an appealing tax-efficient healthcare solution. Opting for such policies ensures holistic coverage for loved ones while optimizing tax savings.
In the realm of healthcare financing, health insurance is essential for both financial security and tax optimization. Also, with the benefits of Section 80D, health insurance gives you a scope to significantly lower your tax liability. It’s time to choose the right health insurance plan for yourself and your family and make your way towards financial freedom.
Tax benefits available under Section 80D of Income Tax Act, 1961 upto Rs. 75,000 subject to change in tax laws (Rs. 25,000 for Self/Spouse/dependent children and Rs. 50,000 for senior citizen parents)
(Views express in this article are personal and do not necessarily represent Outlook Media.)
