How To Fight With The Burden Of Taxes With Health Insurance Plans?

How To Fight With The Burden Of Taxes With Health Insurance Plans?

Do you really feel that India is the only country in the world who is levied with heavy taxes? Taxes on road, food, bills, and taxes on clothing etc…You name it and you pay taxes on all. Unlike other countries like Dubai, Qatar where your salary is also tax free! However everyone would want to save more money and not pay taxes, only if they were not compulsory. Luckily the Indian Government is not that harsh and has given exemptions on few things. The most benefitted amongst them is the Health Insurance policy after Life insurance policies when it comes to saving.

Yes! You are  right, the Health Insurance Plans in India are one of the best tax saving tools and provides substantial amount of tax exemption under section 80D of the Income Tax Act, 1961. Which means you can easily surpass the burden of taxes with Health Insurance Plans.

Health Insurance plans can Save Taxes

Rightly said, the Indian Government has done some provisions where one can save good amount of taxes. Also as per the financial planners, the first step to ensure adequate financial planning is by getting your health Insurance done.  i.e. one must get a health insurance cover for self and family to save for your long term future goals. In a health insurance policy the premium paid towards your Health Insurance Plan gets a tax benefit by reducing your taxable income thus reducing your tax liability.

Here are few things on basis of which you can save tax.

Inflation has given a substantial rise in the cost of food, clothing etc., along with the hospitalization expenses. However the premium paid towards the health insurance policy of your parents also qualifies for a tax deduction under Section 80D of the Income Tax Act.  The tax benefit is available to self, spouse, children and parents and it does not matter whether the children or parents are dependent on you.

The maximum deduction one can avail on a Health Insurance plan is Rs. 25,000, which can be paid towards self, spouse and children. For health insurance of parents one gets additional benefit of Rs. 25,000 (age of the parents should be not more than 60 years). If the parent is senior citizen aged more than 60 years, the maximum tax benefit one can avail is up to Rs. 30, 000.

  • Riders for health Insurance policies

Exempting tax is not only liable on the basic Health Insurance policies, but also towards the critical illness riders or other Health Insurance policy riders available with various life insurance plans. It is exempted under the Income Tax Act, 1961.

  • Benefits on health check-ups

You heard it right! One can get a benefit on preventive health check-ups up to Rs.5, 000.. This amount is inclusive of the overall limit available under Section 80D of the Income Tax Act.

Features of Health Insurance

We are definitely not the age where food, the quality of air etc. was clear and fresh. It all came very naturally, however today everything is diluted. Which means we are doubling the risk of health. In that case health policy is a mandate. Before selecting one should keep the below features of a Health Insurance plan in mind.

  • Pre and post hospitalization

One should definitely look for Insurance plan which covers pre and post hospitalization expenses. There bills are reimbursed in this case.

  • Cashless hospitals

It is vital to buy a policy which has cashless hospitals near you. Cashless hospitals will help you with a cashless treatment hence relieving your loved ones from the stress of claim. Therefore, look for an insurer that offers a strong network of empanelled hospitals.

  • Co-pay

Co-pay is a portion of claimable bill that you as a policy holder agree to pay from your own pocket. It is mostly 10- 20 %. However one should opt for a health insurance policy with No co-pay.

  • Critical illness policy

One can always opt for a critical illness policy for life threatening diseases like Cancer, heart attack, brain tumours, kidney failures etc.

  • Top up and super top up policies

Policies like these are as good as bonus to the customers. One can buy these over and above the base health insurance policy. The only conditions to use this are below:

Top up policy: It is compulsory to exhaust the deductible amount in every claim

Super top up policy: In this type of a policy, you have to exhaust the deductible amount every year.

However it is always advisable to buy a super top up policy.

Therefore buying a health insurance policy will not only save you from the hospitalization expenses but also ease the tax burden off your shoulders.

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