Tips to save Taxes with Medical expenses
Healthcare is the most important thing and is the top priority of everyone but the sudden rise in healthcare expenses has become a result of declining health conditions for the mechanical urban lifestyle.
This is the reason why the healthcare insurance provided by the employer is not sufficient as the sum insured would not be sufficient enough. According to the Income Tax Act 1961, investing in medical insurance is a very important step to enjoy the benefits of tax deduction and it also will save the insured and his family from tax liabilities.
About Section 80D of Income Tax Act 1961: A big part of income of common people generally goes into buying a medical insurance and maintaining the family wellbeing take a big part in financial planning and tax release. Under section 80D, if anyone buys a mediclaim policy to cover hospitalization expenses, health treatment and medical tests can get tax exemption.
Here is a list of the savings while buying a health insurance plan for himself or his family:
- Buying a health insurance for yourself help to get entitled for tax consumption up to Rs. 25000.
- Buying health insurance plan for elderly parents and yourself can help to avail a whole tax benefit of 55000 (where Rs. 25000 for the person and rest Rs. 30000 for the elderly parents).
- Parents below the age of 60 years would not fall for the senior citizen category and the tax exemption limit would be Rs. 25000.
- Preventive medical checkups are led for the insured person and other dependent family members where the exemption limit would be Rs. 5000.
- The maximum limit of tax deduction is only Rs.60000 for any health insurance policy holder.
Vital factors to know for availing tax benefits from mediclaim policy:
Exemption from regular medical expenses:-
- It comes under section 10A of the Income Tax Act 196.
- The limit of tax exemption is of up to Rs. 15000.
- If any health insurance employer provides health insurance benefits, then insured will save up to Rs. 15000 from total taxable salary.
- Employees will get an exemption on their medical bills which include chemist bills, health checkup bills and also medical consultation fee.
- Medical expenses for family members include spouse, children and parents are also added.
- It is a simple procedure, just need to give the original copy of the medical bills to the company HR or can follow company’s protocol.
Exemption from precautionary medical checkups:-
- It comes under section 80D of the Income Tax Act 1961.
- The tax exemption limit is up to Rs. 5000 which is a part of the comprehensive deduction.
- Medical tests are for everyone including the insured and the family members.
- Insured just need to submit the original copy of the laboratory receipt where the tests are done.
Exemption from health treatment of specially challenged dependents:-
- It is under section 80DD of the Income Tax Act 1961 and the tax exemption limit has increased from 50000 to 1 lakh.
- This exemption is valid for the treatment of your partner, children, siblings and other dependent family members.
- If there is more than 80% disability can be seen in insured, then he will get an exemption of up to Rs. 1 lakh per year from total taxable salary.
- To claim this, insured have to submit a proof of medical documents of the hospital proving disabilities.
Exemption from health treatment of specially challenged dependents:-
- It is under Section 80DDB of Income Tax Act 1961 and the limit of tax exemption is up to Rs. 40000 to 80000.
- If any of the family members suffer from any specific disease which is beyond 40% disability, then insured can file a claim for expense.
- Some life taking or very serious diseases are also fall under this category are like AIDS, Cancer, Thalassemia, Kidney Failure or Neurological syndromes.
- The exempted amount varies with the age of dependent like for up to 60 years the relief will be Rs. 40000 form the tax deductions, from 61-80 years it will be 60000 and above it is Rs. 80000.
- To claim this, insured have to give the medical prescription and bills; also need to fill up Form 10-1.