Save income tax with health insurance under Section 80D: Here's how

Health insurance is considered one of the most valuable investments individuals can make to cover unexpected medical costs. To encourage the purchase of health insurance, the government offers tax advantages under Section 80D of the Income Tax Act, 1961.

This section offers tax deductions for premiums paid towards health insurance policies, making it an attractive option for individuals looking to manage both their health and taxes efficiently.

Eligibility and deduction limits

Taxpayers can secure deductions on the premiums paid for themselves, their spouses, dependent children, and parents under Section 80D. The deduction limit varies: individuals below the age of 60 can claim up to Rs 25,000, while the limit for senior citizens is Rs 50,000. An additional deduction of the same amount is available if insurance is bought for parents, with the amount depending on the parents' age.

Additional benefits for preventive health

Besides insurance premiums, Section 80D allows deductions for expenses on preventive health check-ups within the same limits. This includes a separate deduction of up to Rs 5,000.

Choosing the right policy

Selecting the appropriate health insurance requires careful consideration. Bajaj Finance offers some suggestions:

Comprehensive coverage: The policy must cover a wide range of medical needs, including hospitalisation, treatments, and pre-existing conditions.

Balancing premiums and coverage: Comparing different plans to find one that offers a good balance between cost and the breadth of coverage is essential.

Family health needs: Policies should be tailored to the specific health requirements of one’s family, ensuring coverage for critical illnesses, maternity needs, and more.

Network hospitals: Ensuring the policy includes a broad network of hospitals will guarantee access to quality care without incurring out-of-pocket expenses.