Tax planning made simple: Here’s how health insurance can save your money
Understanding Section 80D
The premium amount paid for health insurance is tax-deductible under Section 80D of the Income-tax Act. This section allows individuals to claim deductions of up to Rs. 1 lakh per year for premiums paid towards health insurance policies for themselves, their spouse, children, and parents. Here's how the deduction works:
- For self, spouse, and dependent children: You can claim a deduction of up to Rs. 25,000 per year for the health insurance premiums paid for yourself, your spouse, and dependent children. If you or your spouse is a senior citizen (aged 60 years or above), the maximum deduction allowed is Rs. 50,000 per year.
- For parents: You can claim an additional deduction of up to Rs. 25,000 per year for the health insurance premiums paid for your parents. If either of your parents is a senior citizen, the maximum deduction allowed is Rs. 50,000 per year.
- Aggregate limit: The total deduction available under Section 80D, including premiums paid for self, family, and parents, cannot exceed Rs. 1 lakh per year. If you and your parents are senior citizens, the maximum deduction limit increases to Rs. 1.5 lakh per year.
It's important to note that to claim this deduction, the premium must be paid from your taxable income. The deduction is available regardless of whether the policy is purchased for yourself, your spouse, children, or parents. By investing in health insurance, you not only secure your family's health but also enjoy tax benefits*, making it a valuable financial planning tool.
Making the most of your tax savings
To make the most of your tax savings through health insurance, let's consider the following:
- Choosing a comprehensive plan: Select a health insurance plan that provides
