Being healthy has numerous positive effects on your physical, mental and emotional health. However, they may be times when you suffer from unexpected medical emergencies like diseases or medical conditions. The cost of treatment sometimes is exorbitant leading to strain on your finances. During such times, opting for a healthcare plan becomes necessary.
A health insurance policy offers numerous advantages in terms of coverage. It covers the insured by reimbursing the hospital bills. Besides, the insured may also opt for the cashless facility. Under such an arrangement, it is required to get admitted to a hospital listed in the insurance provider’s network. The insurance company then examines and settles the health insurance claim with the hospital directly.
Besides providing the benefit of coverage, healthcare plans also offer tax advantages for Indian policyholders under the Income Tax Act, 1961. The premium paid is deducted from your total income and is exempted from tax up to a certain amount.
Following are five lesser known facts about tax benefits of signing up for health coverage.
- Cash payment of premiums is not accepted
Do not make cash payments towards your premium if you wish to avail of tax benefits, as cash payments are not admissible for deduction. Instead, opt for a digital mode of payment like Internet banking, draft, or through credit cards. Additionally, you may even submit a cheque in favor of the insurance provider. However, payment towards preventive health checkup can be made in cash.
- Deductions for parents, spouse, or children
The premium paid towards health insurance qualifies for deduction for self; spouse, children, and parents under section 80D of the Income Tax Act. The maximum deduction for policyholders below the age of 60 is capped at Rs. 25,000. In case the policy is taken for an individual above the age of 60, the maximum tax benefit is Rs. 30,000. In case the policyholder and parents both are above the age of 60, the tax benefit would be a combined of Rs. 60,000.
m towards enhanced benefits, you may claim a deduction only for the amount you have spent.
Given the increasing lifestyle ailments, it becomes necessary to cover yourself in the case of any untoward medical issue. Also, the cost of medical expenses is rising rapidly. Opting for a health insurance plan goes a long way in keeping your finances intact in case of medical emergencies.
