Rise in tax benefit have proved to be a bliss for health insurance policyholders

According to the Union Budget 2015-16, the tax benefit for health insurance has been raised. This means you have got another opportunity for saving additional tax. With the revised tax benefit scheme now you can save up to Rs 65,000 under the section 80D.

How much can you save for health insurance premium of your family?

The tax deduction is applicable for paying premium of health insurance. You can claim maximum Rs 25,000 as deduction for health insurance premium for yourself and your family comprising of your spouse and dependent children. In case you are a senior citizen the maximum limit for claiming deduction will be Rs. 30,000.

 

How much can you save for health insurance premium of your parents?

Aside from your family, you can also claim deduction on tax for premium of health insurance of your parents. The maximum limit is Rs 25,000 for this deduction and of your parents are senior citizens you can claim as much as Rs. 30,000 for tax deduction.

Sameer works with a private company and he and his family are covered by a group health insurance scheme provided by his company. Even though, his parents are covered by same health plan, Sameer bought a separate health insurance only for his parents. Sameer pays Rs 38,000 as the total premium of his two best health insurance in India plans. How much can he claim for tax deduction?

 

In this scenario, Sameer’s first health cover is group cover so he cannot make any claim. However, for the separate health cover for his parents he can claim Rs. 25,000 and if his parents are senior citizen he can claim up to Rs 30,000.

 

Conclusion:

The higher tax deduction is particularly beneficial for older people in late-30s who buy family floater plan worth over Rs 5 lakh including senior citizen parents. Usually these people pay around Rs 45,000-Rs 50,000 annually for the premium of family-floater health plan. People with specific health conditions pay higher premiums as well and they have also found the higher tax deduction limit advantageous.

 

Senior citizens, in spite of being healthy also pay higher premiums. These people have also made the most of higher limit on tax deduction.

 

According to survey, India’s total expenditure on health now stands at Rs. 4000,000 crore per year. However, health insurance cost is only Rs. 20,000 crore or 5% of the entire expense on health. The most prevalent way of medical expense is “out-of-pocket” which is the most incompetent way of managing medical expense.

 

A rise in the tax exemption limit has proved to be a great way to encourage people to consider health policies with higher sum insured and avoid ever-increasing medical cost.

 

[Source: http://blog.gibl.in/rise-in-tax-benefit-have-proved-to-be-a-bliss-for-health-insurance-policyholders/]