How to save tax on health insurance premiumadmin
The initial phase of financial planning is to ensure that one has satisfactory medical coverage. Every individual must get sufficient health insurance coverage for self and family even before starting to save for his objectives.
In addition, the premium paid for Health Insurance coverage likewise gives a tax benefit. It will decrease your taxable salary and along these lines your tax liability. Here are four things to consider about how to save tax on Health Insurance Premium for Fiscal Year 2016-17 and 2017-18:
The limits for claiming tax benefits for Health Insurance:
According to section 80 of the Income Tax Act, the premium paid towards health insurance policies qualifies for the deduction. The benefit is available to individuals on health insurance premium paid for self, spouse, children, and parents. Significantly, it doesn’t make a difference whether the children or guardians are dependent on you or not.
The quantum of, tax benefit depends on the age of the individual who is medically insured. The maximum tax deduction benefits from of Rs 25,000 per year on the premium paid for self, spouse, children, and guardians. It is provided if the age of the individual is not above 60 years.
On the off chance that the premium paid by an individual is towards health policies for his or her parent who is a senior citizen of age at least 60. The tax deduction is availed of Rs 30,000. A citizen may expand his tax benefits under section 80D to a sum of Rs 55,000. If the individual’s age is below 60 while guardians age is over 60.
For those taxpayer individuals who are of age 60 or more and are also paying a health insurance premium for their parents. The maximum tax benefit would be a total of Rs 60,000.
For those individuals who are paying Rs. 25,000 Health Insurance premium for self and family. The amount of tax saved at 10%, 20% and 30% tax rate will be Rs 2,575, Rs 5,150 and Rs 7,725 respectively. This will be over and above anything one saves under section 80C of the Income Tax Act.
Health cups: heck-
Within the maximum limit of Rs 30,000, the preventive health check-ups get a benefit of up to Rs 5,000. This means if you pay a premium of Rs 20,000 towards Mediclaim and undergo a health check-up costing Rs 5,000. The total of Rs 25,000 can be availed under section 80D. Most prominent hospitals offer preventive health check-up packages. With the way of life sicknesses on the ascent, it’s always better to watch out for one’s wellbeing.
Tax Benefit available on all types of Health Insurance:
Both ‘indemnity’ and ‘defined benefit’ kinds of health insurance plans would qualify for tax benefit. Not just the individual health insurance plan is popularly known as Mediclaim and Family Floater plans. But also defined benefit plans such as daily hospital cash plan and critical illness plan qualify for such tax benefit.
In order to avail tax benefit, one may pay the premium in cash. However, the income tax rules disallow tax benefit on premium paid in cash. One may, however, pay by Internet banking, cheque, draft or even by credit card to get the tax advantage on premium. However, cash payment for preventive health check-up is eligible for section 80D benefit.
In the case of health insurance, which in any case is not an investment. Paid Premiums not only buys you health cover but also aids in saving taxes. In view of the rising hospital costs, buying a health insurance certainly helps. Lastly, as health insurance plans vary a lot in terms of features, make an informed buying decision.