152439 SIP myths you must know!
Health insurance can be a useful tool to cut your tax outgo and increase savings
Premium payment of health insurance can give you additional deduction under section 80D of Income -Tax Act 1961. Section 80C of Income Tax is by far the most popular way of claiming deduction on your income. More than often people don’t see beyond section 80C to for tax saving investments. But do not forget 80D as it not only saves your tax but encourages you to buy a health cover as well.
How does 80D work ?
You can claim a deduction of Rs. 25,000 by paying for health insurance premium for yourself, your spouse and your dependent children.
You can add a further deduction of Rs 25,000 if you are paying the health insurance premium for your parents .
If your are parents of 60 years and above then you will be able to get a rebate on their premium payment of up to Rs 50,000. That is, Rs 25,000 for yourself and Rs 50,000 for senior citizen parents – a total rebate of 75,000 rupees can be claimed.
Deduction of Rs 5,000 under 80D can be claimed for preventive health check-up. If you get a blood test or a full body check-up, you can claim this expense as deduction. But it will be included in the limit of 25,000 only. You can get a discount of up to Rs 20,000 on the premium payment and Rs 5,000 more on the Preventive Health check up.
Keep this in mind
Do not pay in cash. Whether you pay premiums or you pay for preventive health check-up the payment needs to be made via cheque, card or online banking.
No deduction under 80D is available for the payment made for your siblings’ insurance.
The group health insurance cover given by organisations are not covered under section 80D
If senior citizens do not have health insurance, they can claim their medical expenses through 80D. Up to 50,000 can be availed. If children are spending this, then they can claim it or senior citizens themselves can claim it.