The financial year is coming to an end, and it is time for tax declaration, and optimising your tax strategies. One such avenue is Section 80D of the Income Tax Act, which offers taxpayers the opportunity to save on taxes through health insurance plans. With the rising cost of healthcare, investing in a comprehensive health insurance policy not only provides financial protection against medical emergencies but also serves as a strategic tool for tax planning.
Understanding Section 80D of the Income Tax Act
Section 80D of the Income Tax Act, allows individuals to claim deductions on premiums paid towards health insurance policies. This section provides tax benefits to:
· Individuals
· Hindu Undivided Families (HUFs)
The deductions under this section are available for premiums paid for self, spouse, dependent children, and parents.
Benefits of buying a health insurance policy
Getting a health insurance policy offers a multitude of benefits, making it a prudent financial decision. Some of the key advantages include:
· Financial protection: It provides coverage against unforeseen medical expenses arising from illnesses, accidents, surgeries, hospitalisations, and more. It safeguards your finances by covering the costs of medical treatment, thereby preventing a significant financial burden.
· Access to quality healthcare: You gain access to a network of hospitals and healthcare providers empanelled with the insurance company. This ensures timely medical attention and quality healthcare services.
· Preventive care: Many health insurance plans offer coverage for preventive healthcare services such as regular health check-ups, vaccinations, and diagnostic tests. By promoting preventive care, these policies help in the early detection of illnesses and promote overall well-being.
Tax saving opportunities under Section 80D
Section 80D of the Income Tax Act provides taxpayers with significant opportunities for tax savings. The deductions available under this section are as follows:
For self, family, and dependent children: Taxpayers can claim deductions up to Rs. 25,000 for premiums paid towards health insurance policies covering themselves, their spouse, and dependent children. Additionally, an additional deduction of up to Rs. 25,000 is available for premiums paid towards health insurance for parents, subject to certain conditions.
For senior citizens: In cases where the policyholder or the insured individual is a senior citizen (aged 60 years or above), the maximum deduction limit for health insurance premiums increases to Rs. 50,000.
Preventive health check-up: Taxpayers can also claim deductions of up to Rs. 5,000 within the overall limit for expenses incurred towards preventive health check-ups for themselves, family members, or parents, irrespective of their age.
By leveraging the deductions available under Section 80D, taxpayers can reduce their taxable income and lower their tax liability.
It is essential to explore avenues for maximising tax savings while securing vital aspects such as health. Multiple online platforms provide health insurance options tailored for individuals, families, and senior citizens. Among them is the Bajaj Finance Insurance Mall, offering a range of plans in collaboration with leading insurance providers. You have the flexibility to pick the plan that best suits your needs, offering not only health coverage but also serving as an effective means to avail tax benefits.
Section 80D of the Income Tax Act serves as a valuable tool for achieving this dual objective by offering deductions on health insurance premiums. Investing in a robust health insurance policy not only provides financial protection against medical uncertainties but also offers significant tax benefits. By making informed decisions and availing of the tax-saving opportunities under Section 80D, individuals can safeguard their health and financial well-being effectively.
Disclaimer:T&C Apply. Bajaj Finance Limited (‘BFL’) is a registered corporate agent of third-party insurance products of Bajaj Allianz Life Insurance Company Limited, HDFC Life Insurance Company Limited, Future Generali Life Insurance Company Limited, Bajaj Allianz General Insurance Company Limited, SBI General Insurance Company Limited, ACKO General Insurance Limited, ICICI Lombard General Insurance Company Limited, HDFC ERGO General Insurance Company Limited, Tata AIG General Insurance Company Limited, The New India Assurance Company Limited, Cholamandalum MS General Insurance Company Limited, Niva Bupa Health Insurance Company Limited, Aditya Birla Health Insurance Company Limited, Manipal Cigna Health Insurance Company Limited and Care Health Insurance Company Limited under the IRDAI composite CA registration number CA0101. Please note that BFL does not underwrite the risk or act as an insurer. Your purchase of an insurance product is purely on a voluntary basis after you exercise independent due diligence on the suitability and viability of any insurance product. Any decision to purchase insurance product is solely at your own risk and responsibility and BFL shall not be liable for any loss or damage that any person may suffer, whether directly or indirectly. Please refer insurer's website for Policy Wordings. For more details on risk factors, terms and conditions, and exclusions please read the product sales brochure carefully before concluding a sale. Tax benefits applicable if any, will be as per the prevailing tax laws. Tax laws are subject to change. BFL does NOT provide Tax/Investment advisory services. Please consult your advisors before proceeding to purchase an insurance product. URN No. BFL/Advt./23-24/226
Moneycontrol Journalists are not involved in creation of this article.
