Health insurance in India has become a necessity. Rising healthcare costs mean that a minor issue could lead to heavy hospital bills. Apart from helping you during medical emergencies, your health insurance policy can also help you save on taxes. Let’s look at how you can save tax when you buy a medical insurance policy in India.
Save Income Tax with Health Insurance
Under Section 80D of the Income Tax Act, you can claim a deduction of up to INR 25,000 from your annual taxable income when you buy a health insurance policy in India. The benefit is available on policies that offer coverage for you, your spouse and your dependent children. Remember that the total deduction is only INR 25,000 against all the medical insurance policies. Additionally, you can claim a deduction of INR 50,000 if you pay the premium for your senior citizen parents.
A preventive check-up helps detect medical problems, infections or other habits before they become worse or even life-threatening. These check-ups involve several tests that help you look after yourself and your family. Section 80D provides a deduction of up to INR 5,000 per year to encourage people to take preventive check-ups. The health insurance policy premium deduction amount of INR 25,000 includes this INR 5,000 deduction for check-ups.
To enjoy these Mediclaim tax benefits, you must ensure that you pay your premiums through net banking, debit or credit cards, cheque or demand draft. If you pay your premium in cash, you cannot avail any deduction against your health insurance in India. You can, however, avail the deduction of up to INR 5,000 for preventive health check-ups even if you pay for them in cash.
Critical illness health policies help you with the cost of treatment for a potentially life-threatening disease. These policies also provide tax benefits of up to INR 40,000 against payments for particular treatments, such as cardiac disease, chronic renal failure or cancer. The tax deduction increases to INR 60,000 for senior citizens and INR 80,000 for very senior citizens. To claim a deduction while filing your taxes, you must provide a medical certificate from a doctor.
Treatments for Very Senior Citizens
Citizens over the age of 80 might not be able to buy health insurance. If they are not covered under a health insurance policy, you can claim a deduction of up to INR 30,000 per year against their treatment costs. With the preventive check-up, you can claim a total deduction of up to INR 35,000 per year.
At Edelweiss General Insurance, we believe you must plan for every contingency right from the start. We encourage everybody to purchase their health insurance policy at the beginning of the financial year. By doing this, you can enjoy tax deductions while getting the health insurance cover you deserve. You also avoid the last-minute scramble of looking for the best health insurance policy in India for your needs while balancing your tax savings at the end of the year. If you’d like to buy medical insurance today, visit the Edelweiss General Insurance website and look through our medical insurance policy variants. We offer a sum insured of up to INR 1 crore and include critical illness cover as part of our policy. Always check the inclusions and exclusions before choosing a health insurance plan.