If you are ready to buy health insurance online, it means that you are ready to invest in your or your family’s healthcare and financial protection. As you know a health insurance plan offers lots of benefits to the insured person, among which, tax benefits are specifically advantageous for saving money and managing finances more effectively.
This blog will discuss how to maximise your savings from tax deductions under Section 80D, types of health insurance plans and other things to consider while availing tax deductions.
How To Maximise 80D Tax Deductions With Health Insurance?
If you strategically plan your purchase of health insurance and its claims, you can reap the maximum benefits out of the 80D deductions. Some ways are discussed below:
● Plan and Buy Early in a Financial Year
Getting a health insurance plan early in a fiscal year (April to March) lets you get the full advantage of the deductions accessible from the start of the year. Assess your health insurance needs when a year starts, avail good health insurance online and avoid last-minute decisions which may not be financially helpful.
● Get Multi-Year Policies
If you expect an increased income tax rate the next fiscal year you should opt for a plan that lets you pay premiums for multiple years at once. It locks in the present rate and lets you avoid annual renewal hassles.
● Family Coverage Considerations
Do not include your parents in the family floater plan and have senior citizen health plans for them if they do not have one already. The higher premiums of senior citizen health plans and buying separate policies will make the total deductible amount larger.
● Schedule Annual Health Check-Ups
Annual health check-ups are very useful for early detection of illnesses which is very effective in reducing claims per year and gains No Claim Bonus. However, it also maximises the permissible tax deductions.
● Maximise Your Deduction Limits
If your annual premium does not surpass the limit of Rs. 25,000 or Rs. 50,000 you can take several measures like opting for a top-up plan to support the base plan or add a critical illness cover. This will help you maximise 80D tax deductions.
● Keep an Eye on Plan Renewals
Ensure you do not miss plan renewals as a lapse will demonstrate a lack of commitment which some of the deductions demand of you. It is essential to have the continuous benefit from the deductions.
● Organise Your Documents
To streamline the process of tax filing it is essential that you maintain a thorough record of all receipts of preventive health check-ups, premiums receipts, policy papers, etc.
What Are The Types of Health Insurance Plans That Are Eligible for 80D Deductions?
Before you go on and buy health insurance online you should know which type of plans allow 80D deductions:
- Individual Health Insurance: Tax deductions up to Rs. 25,000.
- Senior Citizen Health Insurance: Tax deductions up to Rs. 1,00,000 depending upon the age of plan members.
- Family Floater Health Insurance: Tax deductions up to Rs. 1,00,000 depending upon the age of family members.
- Group Health Insurance Plans: Tax deduction is available if the employee (policyholder) pays the premium.
The Bottom Line
This will help you make a clear decision while buying health insurance online as you now have a clear idea of what type of plans offer 80D tax deductions. With brief yet to-the-point tips on how to maximise tax deductions, you can manage your finances the way you need to.
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