With only three month remaining to work on your investment and tax saving plans, many are looking around for the best available deals in the market. One of the best tax-saving instruments available on the market today is Health Insurance.
There are nearly 20 General Insurance companies in India. The health insurance plans of each of these companies vary in some way or the other. Therefore, to buy the right health insurance policy is a tax in itself, and in order to avail maximum tax benefit from your health insurance plan you need to get a bit smarter.
Here's how you can make the most of your health insurance policy:
It is probably known to all that under Section 80 (D) of the Income Tax Act 1961, the premium paid towards health insurance plan is tax deductible. Also, most of us know that a non-senior citizen can avail benefit of health insurance plan for maximum Rs 20,000/-, while the cap for a senior citizen is set as Rs 30,000/-.
However, very few people know that post Budget 2008, an individual can now avail better coverage for family and parents. Thus, avail better tax exemption benefits. As per the revised section of Income tax, an individual can cover his family (spouse and kids) under health insurance and gain the benefit of maximum Rs 20000 from health insurance premium. At the same time, he/she can cover his/her parent(s) and get the tax benefit of another Rs 20000. Thereby, now an individual can get tax exemption of as much as Rs 40,000, i.e. double the deduction.
Furthermore, many people aren't aware of the tax benefit they can gain from premium towards critical illness insurance cover.