Health insurance is most useful when it comes to handling medical expenses and hospital bills that arise due to emergencies. By paying the premium towards the sum assured of the policy, you ensure that in times of medical emergencies, you are covered by this financial aid. While paying the premiums may seem like an expense, the relief is that they are eligible for tax deductions. To know more about these tax benefits, let’s look into Section 80D under the Income Tax Act, 1961.
What is Section 80D in Income Tax Act?
When you have health insurance, Section 80D of the Income Tax Act enables you to avail tax deductions on the medical insurance premiums or health check-ups. This is applicable for you, your children, your spouse and dependent parents.
Tax Benefits Under Section 80D of the Income Tax Act
The following are the deductions one can avail on the medical expenses with a health insurance policy under Section 80D:
| Case |
Premiums |
Preventive health check-up benefit |
Tax Deduction |
|---|
| You and parents (under 60 years) |
You – ₹25,000 Parents – ₹25,000 |
₹5000 |
₹50000 |
| You/family (under 60 years) and parents (above 60 years) |
You – ₹ 25,000 Parents – ₹ 50,000 |
₹ 5000 |
₹ 75000 |
| You/family and parents (above 60 years) |
You – ₹ 50,000 Parents – ₹ 50,000 |
₹ 7000 |
₹ 1,00,000 |
| Member of Hindu Undivided Family (HUF) (below 60 years) |
₹ 25,000 |
- |
₹ 25,000 |
| Member of Hindu Undivided Family (HUF) (above 60 years) |
₹ 50,000 |
- |
₹ 50,000 |
1. Let’s take the example of Mr Anand here. If he and his parents are under 60 years of age, together, they would be eligible for a tax exemption of up to ₹50,000 (₹25,000 for him + ₹25,000 for his parents). If the total premium does not come up to ₹50,000, then he can avail a preventive health check-up benefit of up to ₹5000, as per Section 80D of the Income Tax Act of 1961.
2. If Mr Anand is below 60 years of age, and his parents are senior citizens (60 years of age or above), he can avail a tax exemption of up to ₹75,000 (₹25,000 for him + ₹50,000 for his parents). As mentioned above, the preventive health check-up amount can be added if the total does not reach ₹75,000.
3. If he and his parents are 60 years of age or above, he is eligible for a tax exemption of up to ₹ 1,00,000 (₹50,000 for him + ₹50,000 for his parents). Here, they can avail the preventive health check-up limit for ₹7000, if the total doesn’t come up to ₹1,00,000.
4. If Mr Anand is the primary policyholder in a Hindu Undivided Family (HUF) and is below the age of 60 years, then he is eligible for a tax exemption of up to ₹25,000. However if he is 60 years or above, the tax exemption limit is ₹50,000.
Kotak Health Shield: A Comprehensive Health Insurance Plan
Having a health insurance cover will ensure that the costs of medical emergencies in your life are properly met. In such cases, having a comprehensive health insurance policy, such as the Kotak Health Shield can be beneficial. This plan provides tax benefits on the premiums under Section 80(D) of Income Tax Act, 1961. The plan covers early or major stages of four critical illnesses with their Cancer Shield, Cardiac Shield, Neuro Shield and Neuro Shield, along with Personal Accident Protection. You can also extend the coverage and include your spouse under the same plan.
Under the Kotak Life health insurance plan, you can avail some benefits like:
1. Cash benefit for daily hospitalisation
2. Income Benefits on the diagnosis of certain pre-specified conditions
3. Waiver of Premium on the diagnosis of certain pre-specified conditions
The Inbuilt Wellness benefits under this plan also include medical repatriation, a second medical opinion, medical monitoring, emergency medical evacuation and compassionate visit.
Conclusion
Choosing a comprehensive health insurance cover is important because it not only is beneficial for tax deductions on medical expenses but also helps keep away the unnecessary stress mental strain caused due to medical emergencies. Get one for yourself and your family without delay.
