An increasing number of people are beginning to understand the importance of medical insurance. While the primary purpose of such insurance is to provide financial coverage for healthcare costs, many may not realize that subscribing to these policies also comes with medical insurance tax benefits. These incentives serve to encourage more people to get insured and are generally applicable for not just individual but also group health insurance plans. A popular example of such is the Niva Health Insurance policy.
Medical Insurance Tax Benefits: An Overview
The government offers several medical insurance tax benefit as a measure to decrease the financial burden on taxpayers. These benefits, usually in the form of deductions or exemptions, result in less taxable income and hence, lower taxes. They are provided under specific sections of the Income Tax Act. However, the limit and benefit available largely depend on the individual’s age and the kind of insurance policy subscribed.
Primary Tax Benefits for Medical Insurance
Section 80D of the Income Tax Act provides for a deduction on premiums paid towards a medical insurance policy. This deduction can be claimed by individuals and Hindu Undivided Families (HUF). For individuals aged below 60 years, the maximum deduction allowed is INR 25,000, which can increase to INR 50,000 if they are over 60 years. This section also offers deductions for the insurance of parents, which can range from INR 25,000 to 50,000 based on their ages.
In the case of HUF, if the family members are below 60 years, they can claim a deduction of up to INR 25,000. However, if any family member is above 60 years, the maximum deduction goes up to INR 50,000.
What about Niva Health Insurance?
Niva health insurance, like any other health insurance policy, falls under the scope of these tax benefits. You can claim a deduction for the premium you pay for your Niva health insurance under section 80D. Keep in mind that the eligibility and limits for deductions remain the same even with this insurance.
Secondary Tax Benefits for Medical Insurance
Apart from Section 80D, there are other income tax laws that also offer deductions, thereby increasing your medical insurance tax benefit. One of these is Section 10(14), which provides for a deduction for medical reimbursement received from your employer. The maximum exemption under this section is INR 15,000.
Another important section is 80DD, where you can claim deductions for medical treatment for disabled dependents. There are two brackets of deductions in this section INR 75,000 for 40% disability and INR 150,000 for severe disability.
Further, according to section 80U, if an individual suffers from 40% disability, they can avail a flat deduction of INR 75,000 irrespective of the amount spent on medical treatment. For severe disability, this limit extends to a sizable INR 1,250,000.
Conclusion
While the ultimate goal of medical insurance is to safeguard the policyholder from hefty medical expenses, the accompanying tax benefits make it an even more attractive investment. However, it’s important to carefully evaluate the terms and conditions of each insurance policy. Take the time to understand your financial position, your family’s medical needs, and the potential benefits of policies like Niva Health Insurance to take maximum advantage of these tax benefits.
Remember, having medical insurance not only ensures peace of mind and financial security during medical emergencies, but also helps you save money through tax deductions. Stay covered, stay healthy, and enjoy the added advantage of tax benefits with your medical insurance. Always consult a tax advisor to understand your benefits more intimately and make well-informed decisions regarding your health and finances.