Health challenges are an inevitable part of life, especially in today’s times. Given the increasing instances of irregular work hours and a sedentary lifestyle, many individuals today not only experience physical discomfort but also expose themselves and their families to financial distress.
Adding to the misery, in case you are diagnosed with a life-threatening ailment such as cancer, you would have to deal with costly medical treatments and hospitalization expenses, costing you an arm and a leg. It is here that having a mediclaim policy assumes the crucial role of providing comprehensive financial assistance. The coverage provided by such a policy can enable you to provide quality healthcare to your loved ones without facing any financial difficulties.
To encourage people to buy health insurance policy considering its importance, a few sections of the Income Tax Act provide tax exemption benefits. If you have a Mediclaim insurance already or are planning to buy one, then here’s what you should know about associated tax benefits:
The exemption amount allowed under section 80C varies as follows-
If no one in your family is over 60 years of age, then you will get an exemption benefit of up to Rs 25,000 on your taxable income. Further, if you also hold medical insurance in your parent’s name who are below 60 years of age, then you will get a deduction of up to Rs 25,000. Hence the total deduction you can claim will be equal to Rs 50,000.
In case only one of your parents is over 60 years of age, then you may claim tax benefits up to Rs 50,000 toward the premium paid towards their medical insurance. Also, the premium that you pay for a policy in your name or that of your spouse and children will give you Rs 25,000 deduction as well. It will make your total exemption benefits up to Rs 75,000 in a year.
If even one member in your family is over 60 years of age, be it you or your spouse, then you may claim deduction up to Rs 50,000 on medical insurance. Additionally, if your parents are also over the age of 60, then the medical insurance paid will fetch you a tax benefit of up to Rs 50,000. All in all, your total deduction, in this case, will be up to Rs 1 lakh a year.
In case you or any of your dependent member is disabled, and you hold a Mediclaim policy for them, you will be entitled to get tax exemption up to the limit of Rs. 75,000. You can avail it for medical treatment, rehabilitation, nursing and training of the individual. In case the disability is severe, the tax benefits will be up to Rs. 1,25,000.
If there are senior or super senior citizens in your family (above 80years), then you can avail of a deduction of Rs. 1,40,000. The amount will be divided as 60,000 and 80,000 between a senior citizen and a super senior citizen.
To avail tax exemption towards your Mediclaim policy, you will need to produce the following documents:
At the time of filing your income tax, keep the following points in mind to make sure you get the maximum benefits for yourself:
Health insurance plans offer you twin financial benefits. The coverage will not only work as a safety net during medical emergencies but will also help you save your hard-earned money in every fiscal year. In this way, Mediclaim insurance serves as a safety net for the policyholder.