With improved medical facilities being available, the cost of medical treatment in India has also simultaneously increased. Most Indian households have one or two earning members while they have dependent children and parents to look after. Health insurance in India has become necessary, as it assists in times of unforeseen hospitalization emergencies.
Most insurance companies in India offer cashless health insurance facility where in the insured can get hospitalization in a network hospital without making any payments. The hospitalization bill is paid directly to the hospital by the TPA/ insurance company subject to the terms and conditions of health insurance policy.
In India, as per Section 80D of the Income Tax Act, a deduction can be claimed by you in respect of the health insurance premium paid for up to Rs. 15,000 p.a when you buy health insurance in India for your family. Additionally, you can also avail a rebate of Rs 15,000 if you buy a health insurance for your parents. If your parents are senior citizens (65 years and above) the rebate is Rs. 20,000. This means an individual can now avail a rebate up to Rs. 35,000 for buying health insurance policies.
Well Known Chartered Accountant, Mr Sameer Arora adds, “The individual paying for the health insurance premium will be eligible for the Income Tax Benefits in India if the following conditions are met:
- Tax payer is an individual or HUF (Resident or NRI)
- The insurance premium paid is in accordance with scheme frame, by General Insurance Corporation of India & approved by Central Government.
- The premium is paid by any mode other than cash.
- It is paid out of income chargeable to tax.
For the purpose of claiming deductions, Mediclaim Receipt is required as a proof of payment.”
For purpose of tax computation, the premium paid is available as deduction from your Gross income that is liable to tax, thus reducing the taxable income to that extent. It is important to remember as per the Income Tax Act; the health insurance should not be paid in cash to avail the tax benefit.
For instance: Ravi has two health insurance policies, one for himself, spouse and dependent children with an annual premium of Rs 13,000 and another policy for his dependent parents who are senior citizens with an annual premium of Rs. 22,000.
Let’s, compute the deduction available to Ravi u/s 80 D for his health insurance policy.
For the first policy Ravi will be eligible to claim a deduction of RS 13,000 (total amount of premium paid as the maximum limit is Rs 15,000)
For the second policy he will be eligible to claim a deduction of Rs 20,000 which is the maximum limit. In totality he will be able to claim a deduction of RS 33,000 for both his policies. The amount you save is your bonus which can be treated as an investment return.
Mr Sameer Arora says, “Section 80D of Income Tax Act is not applicable for Group Health Insurance even if a part of the premium towards the same is recovered from the insured individual as the policy is taken in the name of company on behalf of its employees.”
Apart from the Income Tax Benefits in India, you can be rest assured that you will not have to face financial burden at the time of hospitalization of any family member. You can be certain that your family’s health is not compromised for want of money.
Buying health insurance is a long term investment which offers various financial benefits. And what’s more!!!! You can buy the health insurance policy in just a few clicks. Fill in the required details and you will get a free health insurance quote with various options. You can buy these policies online without any hassle and enjoy the Income Tax Benefits in India.