An Insight on Tax Benefits of Health Insurance – Year 2016-17

Make the most out of tax benefit offered under Section 80D for health insurance policy. Read on to know more about it.
An Insight on Tax Benefits of Health Insurance - Year 2016 (1)
The amount that you pay towards buying health insurance policy gets you tax concessions under Section 80D of the Income Tax Act 1961. The entire purpose of doing so is to motivate the citizens to the get health insurance coverage.

Section 80D and Benefits You Get

You pay a premium for health policies, be it for your family, yourself or your spouse. Under the Section 80D of Income Tax, the amount of premium gets exempted. Other things for which you get an exemption are:

  1. Non-cash payment for your medical/health insurance.
  2. You get Tax Benefits of Health Insurance as an individual taxpayer. This pertains to central government health schemes too.
  3. Individual taxpayers get tax benefits on preventive health check-ups.
  4. Costs incurred for the senior citizens’ health up
  5. Buying policy for other family members of the family or paying for their medical expenses

Are There Restrictions on Amount of Deduction?

As per Section 80D, you can get exemption up to the limits mentioned below-

ConditionFamily members (excluding parents)Total benefit for all Family members (including parents)
None of the members is 60 years of aboveRs. 25,000Rs. 50,000
If parents are above 60 years but family members are notRs. 25,000Rs. 55,000
If parents and age of some member of the family are above 60 yearsRs. 30,000Rs. 60,000

Other Benefits of Buying Health Insurance

Apart from these tax benefits, a health policy provides customized benefits for an individual with different needs.

It offers financial protection to a person for treatment of medical conditions, diseases, and accidents. For someone looking for a base cover.

To provide additional cover at a lower premium, it offers super top-up plans.

It offers an option to go cashless and or reimburse the hospitalization expenses along with the flexibility to cover entire family in one plan.

The benefit plans of health insurance offer payout in case of diagnosis of critical illness.

All the different of plans have one thing in common which is the tax benefit. Being aware of these can help you claim lower taxes, which can, in turn, help you to save more when you file your returns!

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