Insurance for tax benefits: Things to know before you buy
Insurance for tax benefits: Life is full of moments, moments that are much expected and those that are unexpected. Unexpected situations could be because of happiness or personal sadness. While there are there many people/things to celebrate the former, there is health insurance for the latter. Flanked by the growing needs for quality healthcare on one side and inflating costs on the other, the journey to health insurance has become inevitable.
Road accidents cause severe injuries and death to lakhs of people in India every year. With every passing year, new infections and ailments emerge. The increase in pollution and the deteriorating lifestyle of children bring down their natural power to fight these diseases. Healthcare coupled with the growing population end up as a bane in the lives of the middle-class population. Health insurance could be the panacea to these problems. An active catalyst that can push families from all tiers to opt for health insurance. The tax benefits that tag along with them.
How does Budget 2015 favor health insurance?
The 2% increase in service tax during Budget 2015 almost nullified the other benefits of the plan. However, we still heard the good news about health insurance through all that noise. Here is what every taxpayer would be happy to know,
Higher limits on tax-deductible premiums
Earlier, health insurance premium of maximum Rs 15,000 could be subjected to the tax deduction for younger citizens and Rs 20,000 for senior citizens. This amount has been increased to Rs 25,000 and Rs 30,000 respectively. This can offer savings up to Rs 3000 for the ones in the 30% tax group. And a sum of Rs 1000 for the ones in the 10% tax group.
In many cases, individuals buy insurance cover for their spouse and children and often miss out on aging parents. The new tax laws offer better initiatives to consider this option. Individuals buying health insurance for parents below the age of 60 can avail tax deductions. The benefits up to Rs 15,000 and for senior citizen parents the limit is Rs 20, 000.
These measures have come at a time when there has been an escalating pressure on middle –class citizens due to the increasing healthcare costs. The tax saving initiatives offer much relief for families that have been battling these high costs for a long time.
Why is health insurance investment the recommended option for saving tax?
The need for health insurance cannot be ignored in today’s world. The four most important factors that build on one another to lift individuals towards health insurance. Those are a sedentary lifestyle, inflating costs, increased privatization of healthcare and lowering immunity among children and adults. The right step that makes this climb much more comfortable. And worth is the tax saving option that has been explained above. It is true that tax savings can also come in other forms of insurance. But be securing your health along with tax benefits of almost Rs 1 lakh seems to be the need of the hour. After all, when health is lost everything is lost!