To claim tax deductions on health insurance premiums, you must follow these steps:
Check your eligibility: You can claim a deduction on the health insurance premium paid for yourself, your spouse and dependent children up to a maximum of Rs. 25,000 under Section 80D of the Income Tax Act.
Check the type of health insurance policy: The policy must be a health insurance policy that covers you and your family members against medical expenses. The policy can be purchased from any insurer.
Keep the proof of payment: You should keep a record of the premium paid during the financial year. The proof of payment can be in the form of a receipt or an online statement showing the premium paid.
Calculate the deduction: You can claim a deduction of up to Rs. 25,000 for the premium paid for your family members (self, spouse and your dependent children). Under Section 80D, if a person pays health insurance premiums for their parents, then he can claim an extra deduction of up to Rs. 25,000.
File your tax returns: You can claim the deduction while filing your income tax return for the financial year. Make sure you enter the correct details of the premium paid under the relevant section of the tax return.
Eligibility criteria: To claim tax deductions on health insurance premiums, you should be an individual or a Hindu Undivided Family (HUF). The proposer who has remitted the premium is eligible for the Tax exemption. Tax exemption is not eligible if premium payment is made by cash.
Types of health insurance policies: The policy should be a health insurance policy that covers you and your family members against medical expenses. It can be a policy purchased from any insurer.
Tax benefits for senior citizens: Senior citizens can claim a deduction of up to Rs. 50,000 for the premium paid for themselves or their spouse. This is in addition to the deduction amount of Rs. 25,000 that can be claimed for dependent children or parents who are not senior citizens.
Overlapping deductions: It’s important to note that the deduction claimed under Section 80D cannot be claimed under any section of the Income Tax Act.
In conclusion, claiming tax deductions on health insurance premiums is an important aspect of tax planning. By understanding the eligibility criteria and deduction limits, you can reap the tax benefits provided by the government and secure your family’s health.