Payment of premium on life insurance policy and health insurance policy not only gives insurance cover to a taxpayer but also offers certain tax benefits. In this part, you can gain knowledge about deductions available to a taxpayer on account of payment of life insurance premiums, payment of health insurance premiums, and expenditure on medical treatment.
Total income from all the heads of income is called “Gross Total Income” (GTI). To arrive at taxable income, one has to deduct from GTI, the deductions allowable (i.e., under sections 80C to 80D).
Buying medical coverage is one of the best investments that you can make to cover your medical expenses. If you are worried about paying the minute cost of your health insurance premium, imagine how you will manage to pay for expensive medical treatments in case of hospitalization. To encourage people to add medical coverage to their insurance, the government offers tax benefits on health insurance premiums under Section 80D of the Income Tax Act.
Section 80D of the Income Tax Act, 1961 allows eligible taxpayers to avail of tax deductions on the total premium paid towards health insurance in a financial year. It is available on regular health insurance premiums along with the premiums paid for top-up plans and critical illness plans.
Eligible to avail of tax benefits under Section 80D if you pay a premium towards the health insurance policy for yourself, your spouse, children, and parents (including senior citizens). In addition, if you are paying for the expenses incurred on the preventive health check-up, a deduction under Sec 80D will also be available. Moreover, in case your super senior citizen parents do not have a health insurance policy in place, you can still avail of tax deductions on their medical treatments and health check-ups.
Life insurance policies are useful tax planning tools because the policyholder is eligible for tax benefits under the Income Tax Act (1961). There are multiple modes for saving tax, but life insurance is one of the most effective tax planning instruments. the primary and essential requirements of ensuring a financially balanced and comfortable life for your loved ones. The capital benefits that come with life insurance help your family build a safe and safeguarded future, even in your absence.
There are income tax benefits on life insurance. Section 80C of the Income Tax, including Sections 80CCC, prescribes a combination of activities. If you want to utilize your income in some of these activities during the Previous Year (PY) you can claim the amount as a deduction from your total taxable income for the PY. Section 80C provides deductions on various investments up to 1.5 lakh per year from your taxable income.