Medical emergencies can totally drain your savings, unless, of course, you have bought health insurance for yourself and your family. As long as people enjoy good health, they rarely think of medical emergencies, but these emergencies have a way of striking you when you least expect it, like a bolt from the blue. And then you may have to be hospitalized, you may have to bear loss of pay from your job, and your family may have to incur all sorts of unexpected expenses in taking care of you. All your savings can vanish in a jiffy. To avoid this, you would be well advised to take out a health insurance policy.
Comprehensive health insurance
Even better is to take out a comprehensive health insurance policy, as it covers many things that a basic health insurance policy will not cover, such as outpatient treatments including consultations, and medical tests. Certain insurance providers even offer to cover expenses for dental care on the payment of extra premium. And to make it attractive to purchase health insurance the government offers sops by way of deduction in income tax of the premium you pay on your health insurance policy through Section 80D of the Income Tax Act.
Eligibility for deduction under Section 80D
Any individual or an HUF can avail of the deduction in income tax provided for under Section 80D of the Income Tax Act. Under this section you can avail of the benefits not just for the health insurance policy premiums for yourself, but also for your spouse, children, and parents. The tax deduction under 80D, moreover, is over and above the deductions you claim under Sections 80C/CCC/CCD.
How much deduction can you claim under section 80D?
An individual can avail of a deduction up to Rs 25,000, for the insurance cover of self, spouse, and dependent children. If you are paying the health insurance premium of your parents, you can claim benefits of up to Rs 50,000, provided your parents are above 60 years of age. On the upper side, if both you and your parents are over the age of 60, you can claim tax breaks of up to Rs 1 lakh.
Precautionary Health Check-up
The expenses incurred for undergoing preventive health check-ups are eligible for an income tax deduction of up to Rs 5,000, which, however, has to be cumulatively within the above specified limits of Rs 25,000 to 1 lakh as the case may be. While other health insurance premiums have be paid in forms other than cash to be eligible for the tax breaks, the expenses on medical check-ups can be made in cash and still be eligible for tax breaks under Section 80D.
Lumpsum payment of premiums
In case you have bought a health insurance policy which is valid for two or more years but have paid the premium in one go, then you can claim deduction under Section 80D to the extent of the premium which is applicable to that fraction of the lumpsum for the current financial year. However, this will also be subject to the above-mentioned limits. Check out Bharti AXA health insurance today!