Time is money and saving time is earning money. Saving money is something we need to do from day one. It is important to know how to save money while paying taxes. Tax saving is an essential part of financial planning, which needs to be done in such a way that multiple purposes are met.
Investing in health insurance primarily meets your medical financial emergencies. Secondly it saves on income tax annually.
There are certain points under Section 80D of the income Tax Act which allows you to avail income tax exemptions based on premiums paid for one or more health insurance policies purchased for your family.
- If you are a policy holder, you can avail a deduction up to Rs.25000 annually subject to as mentioned above. The coverage offered by the policy can be availed by you, your spouse and dependent children. The limit tax benefits on senior citizen (60 years to 80 years) health insurance plans will increase up to Rs.50000, if you or your spouse falls in this age bracket.
- Under Section 80 D of the Income Tax Act 1961, you can claim an additional tax saving benefits if you pay the premium for health coverage availed by any of your parents. You are eligible to save up to Rs. 50000 for either of your parents aged 60 years and above.
- To avail tax benefits, the premiums of health insurance policies should be done cashless, through demand draft, cheque, debit or credit cards or net banking.
- The cost of medical expenses of very senior citizens (80 years and above) who are not covered under any type of health insurance policy is eligible for tax deduction up to Rs 35000 per financial year. This is also stated under Section 80 D of the Income Tax Act.
- Apart from just protecting you against critical diseases your health insurance also provides tax deductions up to Rs 40000 and Rs. 60000 for senior citizens and Rs. 80000 for very senior citizens. Cancer, chronic renal failure or heart attacks you are allowed to avail a tax deduction between Rs. 40000 to Rs. 80000. There are some specific types of illness covered under the list of Rule 11 DD. It is mandatory to attach a certificate issued by the doctor while filing income tax returns. You can claim these benefits for self, spouse, parents, children and siblings.
- You can save tax under section 80 DBB (treatment of critical illnesses), under section 80 DD (treatment of a dependent with disability) and under section 80 U (person with disability).
Cashless health insurance is quick, fast and saves time. Time is money and money saved is money earned.