In this article I will be writing about the tax benefits for medical insurance. It is very common that most of the companies will enforce their employees to take the medical insurance policies. It is mostly compulsory in the companies. Interestingly most people not aware that the premium paid on the medical insurance is deducted from the taxable income. That means it is tax exempt up to the limit specified in the Income Tax provisions. This article will explore some interesting facts about the tax benefits on medical insurance. I am looking for the feedback after reading the article. You can subscribe to our future articles here.
Section 80d for Medical Insurance
- Many are aware that section 80c helps to save up to Rs.100000 by investing on the various schemes like Insurance policies, Mutual Funds, Home Loans, etc. There is many other sections which helps to save the tax amount from your pocket. Section 80d is one among that for tax deduction, while paying the medical insurance premium. This section provides certain limitations and rules for the maximum amount can be exempted.
- Under section 80d, a person can claim the tax deduction of up to Rs.15000 for the medical insurance premium for self,spouse and dependent children.
- More than that he can claim further Rs.15000 for his parents medical insurance premium. This is Rs.20000 in case his parents fall in seiner citizen(above age 65).
- It is important to note that the medical insurance premium should not be paid by cash, to avail the tax benefit.
X has taken two insurance policies, one for himself, spouse and dependent children and the other one for his dependent parents who are senior citizens. He pays an annual premium of Rs 10,000 & Rs 22,000, respectively, for these two policies. Now, let’s determine the amount of exemption available to X u/s 80D for each insurance policy separately.
In the first case, he will be eligible to claim a deduction of only up to Rs 10,000 i.e. amount of premium actually paid subject to a maximum of Rs 15,000. In the second case, where he has taken a policy for his parents, he would be eligible to claim a deduction towards the premium paid for Rs 20,000, which is the maximum limit. In total, he would be able to claim deduction of up to Rs 30,000 (i.e. Rs 10,000 + Rs 20,000) in respect of both the policies.
This article explains the basic idea on how to avail the tax benefits for medical insurance and the maximum limit on the exemption. There is more examples can be provided with the different scenarios. I will come up with another article on medical insurance and tax benefits. Thank you for reading the article. Please post your opinion on the comments section.