Know Tax Benefits In Health Insurance In 2021
During the tough times of this pandemic, we all have realized the importance of health insurance. A health insurance plan provides financial security during medical emergencies. Apart from financial security, it also plays an important part in reducing our taxable income thus, offering several tax benefits. To understand the tax benefits that you can get from your health insurance plan, you have to first get some idea about Section 80D for Tax Benefits In Health Insurance of the Income Tax Act, 1961.
According to this section, you can get a deduction on your health insurance premium paid for self, spouse, or dependents like children or parents. This means that the premium that you are paying for your health insurance will be deducted from your taxable income and hence, your tax liability will also be reduced. According to the Income Tax Act, the amount deducted will depend upon your age.
Let us have a look at the tax benefits for different age categories.
- If all the members of your family including you, are below the age of 60, you can claim a deduction of Rs. 25,000 on your health insurance under Section 80D.
- In case you want to include your parents in the insurance plan, then you can claim an additional deduction of Rs. 25,000 only if your parents are also below the age of 60. Therefore, you can get a total deduction of Rs. 50,000.
- Now, if your parents are above the age of 60, you can get an additional deduction of Rs. 50,000. Therefore, the total deduction becomes Rs. 75,000 (Rs. 25,000+Rs. 50,000).
- Finally, if the taxpayer as well as the parents are above the age of 60, then you can claim a total deduction of Rs. 1 lakh (Rs. 50,000 + Rs. 50,000).
Benefit Related to Health Checkups
Section 80D provides a further benefit related to health checkups. If you are going for a preventive health checkup, you can claim an additional deduction of Rs. 5,000. This means that above the original deduction of Rs. 25,000 on your health insurance, you can add an extra amount of Rs. 5,000, making it a total of Rs. 30,000 in one financial year.
Now, there are mainly two types of health insurance plans. The first one is the indemnity plan that covers the actual expenses spent on hospitalization for a predefined period. The second one is the defined benefit plan like the Max Bupa Health Recharge Plan that offers financial security against predefined conditions, such as accidents or critical illnesses. You will enjoy the same tax benefits irrespective of the plan you choose. Therefore, you can customize your insurance plans according to your requirements without thinking about the tax liabilities.
Tax Benefits in Health Recharge Plan
Keeping in mind the tax benefits as well as the difficult times due to the pandemic, Bajaj Finserv has come up with Max Bupa Health Recharge Plan. This customizable health insurance plan has affordable premium rates and covers all your expenses related to an accident or critical illness. This is an individual or a family floater plan. The minimum age criteria for this plan are 18 years and the maximum is 65 years.
Now, there are mainly two types of health insurance plans. The first one is the indemnity plan that covers the actual expenses spent on hospitalization for a predefined period. The second one is the defined benefit plan like the Max Bupa Health Recharge Plan that offers financial security against predefined conditions, such as accidents or critical illnesses. You will enjoy the same tax benefits irrespective of the plan you choose. Therefore, you can customize your insurance plans according to your requirements without thinking about the tax liabilities.
