The average life span of an individual has increased in India due to better health conditions, awareness about one’s well being and improved medical facilities. At the same time, the medical costs of treatment and surgery have increased a lot. Therefore, medical insurance makes complete sense, especially where majority of the family members are dependent on one or two earning members, as is generally the case in an average Indian household.
It is a well-known fact that one can save tax up to Rs 1 lakh u/s 80C of the Income Tax Act, 1961. Likewise, payment made for medical insurance u/s 80D of the Act can also help save tax.
As per section 80D of the Act, a deduction can be claimed by an individual in respect of the medical insurance premium paid up to Rs 15,000 for himself and his spouse and dependent children. Additionally, he can also claim deduction for the medical insurance premium up to Rs 15,000 for his parent(s). Further, the aforesaid deductions are increased up to Rs 20,000 in case the premium is paid for senior citizen (65 years or more).
It is important to note that the medical insurance premium should not be paid by cash, to avail the tax benefit.
Dependent with a disability
Further, in case an individual incurs expenses on medical treatment of a dependent with a disability, then he can claim a deduction up to Rs 50,000 / Rs 75,000, subject to the disability of the dependent u/s 80DD of the Act. An individual can claim a deduction up to Rs 40,000 (Rs 60,000 in case of senior citizens) u/s 80 DDB for expenses incurred on treatment of certain prescribed diseases or ailments, subject to fulfillment of conditions prescribed under the Act.
An integral part of overall investment planning
Medical insurance these days is becoming a necessity and one should look at it as an essential investment for the well being of self and family.
These days, many insurance companies provide cashless medical claim facility wherein an individual can get the treatment done in specified hospitals without any payment. The payment for the treatment is made directly to the hospital by the insurance company, subject to the terms and conditions of the medical insurance policy.