FYI: From this year, you get tax deductions even on health check-ups

With every passing day, like everything else, health-care cost is rising and how. And, if you are smart enough to understand that your medical insurance requirement is more than what your employer provides, you must have bought your own medical policy or plan to buy one in the next few weeks. The good part is that apart from giving you access to your own medical care, buying medical insurance also offers you income tax benefits.

Section 80 D offers you tax benefits in the form of deduction for premiums you pay for medical insurance. But, like every tax benefits, there are a few things you should keep in mind to make the most of this benefit.[caption id=“attachment_601039” align=“alignleft” width=“380”] Medical emergencies. AP[/caption]

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Who can claim: An individual as well as a Hindu Undivided Family (HUF) can claim this deduction. If fact, even if you are a senior citizen, you will be able to claim this deduction.

For whom: You can get this tax deduction when you buy a medical policy for self or your family. Family here is defined as your spouse and dependent children.

How much: “Here you can avail a tax benefit of premium amounts paid up to Rs 15,000.If fact, when you buy medical insurance to cover your (non-senior citizen) parents (mother or father or both) you will get an additional deduction of Rs 15,000,” says Pankaj Mathpal, certified financial planner and CEO, Optima Money Managers.

And, if your parents are senior citizens, this limit is up to Rs 20,000. Now keep in mind that if you’ve paid medical insurance premiums for your in laws, you won’t be able to claim the tax deduction.

Let’s see how this works.

Case One: Say, you bought a medical policy for self and family and paid a premium of Rs 11,000. And, you also bought a policy for your parents who are not senior citizens, and paid a premium of Rs 16,000. You can claim a tax deduction of (Rs 11,000 + Rs 15,000) that is Rs 26,000.

Case two: Say, you bought a medical policy for self and family and paid a premium of Rs 11,000. And you also bought a policy for your parents who are senior citizens, and paid a premium of Rs 16,000. You cam claim a tax deduction of (Rs 11,000 + Rs 16,000) Rs 27,000.

Senior Citizens: “If you are a senior citizen, you can get a deduction of Rs20,000 for self and family,” says Anuj Bhagia, head marketing, Policybazar.com. And if you have parents who are senior citizens and you buy a medical insurance policy for them, you will get an additional tax deduction of up to Rs 20,000. Hence the maximum deduction available under this section is up to Rs 40,000 in respect of medical insurance. Of course, this case would be rare.

Important things to keep in mind:

Mode of payment: There are times when you pay cash to our insurance agents to buy a policy. Yes, there are many who do so. But, keep in mind that as per IT laws, to claim the deduction under Section 80 D, you should make payments in any mode other than cash. Bhagia says, “So, a cheque or even a net banking or credit card payment will do, if you are buying a policy online like from a online insurance aggregators.”

Preventive health check up: “One more thing to keep in mind is that from Assessment Year 2013-2104, you can claim within the existing limit a deduction of up to Rs 5,000 for preventive health check-up,” said Mathpal.

So if you have done any kind of preventive help check-ups, like blood tests and the like, keep the bills and you will be able to use the same to get a tax deduction. Remember this amount can be paid in any mode including cash payment.

“This is a very good initiative. Reason being, normally if you buy a family floater medical policy for, let us say, Rs 5 lakh, the premiums pay is around Rs 10,000. So, in the past many were not able to exhaust the Rs 15,000 limit under Section 80 D. With the preventive health check-ups of Rs 5,000, coming under this section, now you can make the most of section 80 D tax benefit,” said Mathpal. This is a win-win situation, which will help you take regular preventive health check-up, which many of us ignore.

Now that you know more about the deduction under Section 80 D, make the most of this information. See, if the premiums you’ve paid make the most of the deduction limit, if not may be it’s time to get some preventive health check ups.