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The importance of buying health insurance cannot be understated. Your health insurance bails you out during medical emergencies. With a small annual premium, you end up saving lakhs of rupees that you would otherwise pay on hospitalization, surgeries, and medical reports and so on, if you did not have health insurance. Not only can you breathe a sigh of relief due to the insurance cover, you can also avail various concessions and tax benefits from investing in health insurance policies. Let’s find out how you can save on health insurance.

Tax deductions

Section 80 C of the Income Tax Act offers several deductions on the purchase of health insurance policies for self, spouse, dependent children and parents based on the premium payer’s age bracket. They are as under.

• Individuals under age 60 purchasing health insurance policies for self, spouse and dependent children can avail an annual deduction of ₹25,000.

• Individuals paying the premium of parents’ (under 60 years) health insurance policy can avail an additional deduction of ₹25,000.

• Individuals under 60 years paying insurance premiums for parents above 60 years can claim ₹25,000 deduction on their own policies and ₹50,000 for their parents’ policy i.e. an annual deduction of ₹75,000.

• Individuals above 60 years, paying for their family (self, spouse and dependent children) and their parents’ policy qualify for deductions of ₹50,000+ ₹50,000 = ₹100,000.

Saving tax on preventive health check up

You can also undergo preventive health check-ups based on the clauses of your insurance policy during the term of your policy. Individuals under 60 years can avail tax exemption of ₹25,000 where as those above 60 years can avail tax exemption of ₹30,000 towards preventive health check-ups. Furthermore, you can claim an extra benefit of coverage of up-to ₹5,000 per annum against preventive health check-ups.

Critical Illness treatment

Under Section 80DDB, critical illness treatments qualify for tax deductions of ₹40,000 for the treatment of critically ill patients under the age of 60, whereas the tax deductions for treating critically ill patients over 60 years of age increases to ₹80,000. Diseases such as cancer, cardiovascular and renal diseases qualify as critical illnesses.

Treatment for persons with disabilities

As per Section 80 U Persons with disabilities are typically divided into 2 categories

• Persons with 40% disability – such individuals can avail tax deductions of 75,000 per annum.

• Persons with 80% disability and above – such individuals can avail tax deductions of up-to ₹125,000 per annum.

Disabilities covered under this act include

• Blindness and low vision

• Hearing disabilities

• Leprosy

• Mentally challenged/ mental illnesses

• Loco motor disabilities

• Autism

• Cerebral palsy

Treating dependants with disabilities

If you are bearing the financial responsibilities of a person with disability, you can avail tax deduction of ₹75,000 to ₹125,000 for the treatment expenses under Section 80DD. Note that such dependants can only be your spouse, siblings or children.

Medical Allowance

You can avail an annual tax deduction of ₹15,000 as medical allowance, as part of your salary component, towards the purchase of medicines for yourself, spouse, children, siblings and dependant parents, provided you furnish bills.

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