4. Health Insurance/Mediclaim Under Section 80D
Health insurance not only safeguards you against costs for hospitalization but also saves taxes on premiums paid. This dual advantage is because the premiums paid are deductible under section 80D of the Indian Income Tax Act. What’s more, you can include even the premiums paid for your family and dependent parents.
Amounts of up to ₹ 25,000 for health insurance cover for yourself, your spouse, and your dependent children can be deducted from taxable income. In addition, you are also eligible to claim a deduction of ₹ 25,000 paid towards health insurance for your parents if they are below 60 years of age. In case you and your parents are both above 60 years of age, then you can claim a deduction of up to ₹ 50,000 each, i.e., a total of ₹ 1 lakh!
For example, if you are 40 years old and are paying ₹ 35,000 towards premiums for your family and ₹ 45,000 for your father, who is 70 years old. In this case, you can claim a deduction of ₹ 25,000 and ₹ 45,000, which works out to a total of ₹ 70,000. Alternatively, if you are paying ₹ 18,000 for your family and ₹ 55,000 for your parents, you can claim a deduction of up to ₹ 68,000.
There is also an incentive for underdoing preventive health check-ups. ₹ 5000 spent on health check-ups for you or your family is also eligible for deduction under section 80D, although this is included under the overall limit.
