The tax season 2011- 2012 is here, and as usual most of us have started looking for Tax saving investments.
We mostly look for options that will help us save our taxes as well as offer a good return on investment. When looking for great long-term returns, one of the best investments undoubtedly, is Health Insurance, which can save up to Rs. 10000 of your income tax bill.
Health insurance, commonly known as Mediclaim in India, provides a cover for comprehensive hospitalization expenses related to accident and sickness. It also has a cashless network of hospitals, where Insurance Companies directly settle bills with the Hospital, hence ensuring lowest out of pocket expenses for you.
Alarming rise in Healthcare Costs:
At an alarming 18-25% inflation, Healthcare costs are becoming more and more unaffordable for the common man. A major hospitalization in a good hospital can cost anywhere close to Rs. 3-4 Lakhs. Investing in a good health insurance product with an adequate cover is no more a luxury. It is the only way, in the long term, which can empower your family to choose quality medical care, and not worry about the rising healthcare costs in case of an unfortunate hospitalization.
The value you can get from such an investment is beyond the compound interest you can earn in other investments like mutual funds or life insurance, making it one of the best tax saving investments to choose from.
Who can you cover?
You can buy health insurance in India for self or buy a policy that covers the entire family, including some plans that cover parents or parents in laws in the same policy.
What is the Tax benefit?
The premium paid towards Mediclaim policy offers tax deduction under Section 80D of the Income Tax Act.
The 80D deduction is available only to individuals and (HUF) Hindu Undivided Family members.
In case of a health insurance policy the tax deduction available for 2011- 2012 is as follows:
- Insurance for Self, Spouse and Kids - Rs 15,000 p.a.
- Insurance for Parents
-If both parents are less than 60 yrs. old, an additional Rs. 15000 deduction is available.
- If one of the parent is 60 yrs. or above, an additional deduction of Rs. 20000 is available.
In short, an individual can avail a whopping Rs. 35,000 deduction on his/her Income, by investing in a health insurance policy.
Most Ignored Aspects of Tax Planning:
Parents' Health Insurance is the most ignored aspect of Tax planning. Most people, including many accountants are not aware, about the additional Rs. 20000 deduction, one can claim for Health Insurance for parents. What's more it is one such gift that will bring long-term benefits for your parents, without compromising on quality.
It is important to note, that the premium amount should be not be paid in cash.
Also, remember, Mediclaim 80D deduction is not applicable for corporate health insurance plans, as the corporate health insurance policy is taken in the name of the company on behalf of its employees, unless, if the premium is paid by the employee through a payroll deduction or online through electronic payment options like Credit Card, Debit Cards, Internet Banking etc.
Let’s face it, the Government of India through the Income tax law, is doing its bit in encouraging the population, to cover our families, ensuring quality healthcare. The least, we can do is explore good available products or covers and ask for a quote.
In case you would like to know more about how you can independently cover your parents, you can call Medimanage experts on Toll free number-1800 102 8666 or post your inquiry here.