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A comprehensive health insurance plan is a must-have regardless of what age you are, since ill-health can befall anyone at any time. With the rising number of illnesses and increasing cost of healthcare, treating an illness or ailment without insurance can leave a big dent on your savings. A health insurance policy can help you save your hard-earned money in case of a medical emergency. Apart from the coverage benefits that these policies offer, health insurance plans also help you save money by availing tax benefits/tax deductions under the prevailing laws of the Income Tax Act, 1961.
Insured Persons | Below 60 Years of Age | Above 60 Years of Age |
---|---|---|
Self, Spouse, and Children | Rs.25,000 | Rs.30,000 |
Parents | Rs.25,000 | Rs.30,000 |
Preventive Health Checks | Rs.5,000 | Rs.5,000 |
Maximum Deduction | Rs.50,000 | Rs.60,000 |
Both individuals and Hindu Undivided Families (HUFs), who are residing in India for the given tax year, are eligible to claim tax benefits under Section 80DD. Tax benefits can be availed for expenses incurred in the treatment/medical care of a dependent family member who suffers from a disability, such as blindness, hearing impairment, autism, etc.
Criteria | Exemption Limit |
---|---|
Disabled Dependent (40% disability or more) | Rs.75,000 |
Severely Disabled Dependent (80% disability or more) | Rs.1,25,000 |
*Note: Tax benefits mentioned are for the assessment year 2016-2017.
Hindu Undivided Families (HUFs) and individuals, residing in India, can avail tax benefits under Section 80DDB for treatments undertaken for certain specific diseases, such as Dementia, Aphasia, Parkinson’s Disease, Motor Neuron Disease, Chronic Renal Failure, Malignant Cancers, Thalassemia, Haemophilia, AIDS, Ataxia, Dystonia Musculorum Deformans, Hemiballismus, Chorea, and Motor Neuron Disease.
The tax benefit can be claimed for treatment of self, spouse, parents, children, or siblings, provided they are dependent on you.
Age of Individual | Exemption Limit |
---|---|
Individuals under 60 years of age | Rs.40,000 or the actual amount paid for the treatment, based on whichever is the lesser of the two |
Individuals between 60 and 80 years of age | Rs.60,000 or the actual treatment cost, based on whichever is the lesser of the two |
Individuals over the age of 80 years | Rs.80,000 or the actual cost of treatment, based on whichever is the lesser of the two |
*Note: Tax benefits mentioned are for the assessment year 2016-2017.
Individuals who suffer from disability can claim tax benefits up to Rs.75,000 in case one suffers from a minimum of 40% disability and up to a sum of Rs.1,25,000 in case of severe disability.
The primary purpose of any health insurance policy is to provide the insured member a risk cover against any expenses that he/she might have to incur due to an unplanned or planned hospitalisation. However, investing in a health insurance plan not only buys you a comprehensive risk cover, but it also helps you avail tax benefits, and thereby save more money.
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