A sound financial decision always suggests you to be prepared for your worst financial emergency and never overestimate your income. Always keeping aside for each unfavorable possible scenario by looking at the current atmospheric conditions would definitely be considered as being protective, not as an overprotective and negative mindset as parents for your child.
Buying health insurance is a sign of protection toward your child. Your finances might become a problem when it comes to giving the best medical facilities whenever your child needs it, as India has recorded the highest medical inflation among Asian regions at 14% in 2021. In such a case, the government recognises the need of giving tax benefits on buying health insurance in India.
In this article, we will talk about the tax benefit you can avail while buying a health insurance policy for your child. There is majorly a tax provision under section 80D in which you will get tax benefit of up to ₹25,000. Let’s know everything about the benefits of insuring your child.
READ MORE: 5 reasons why your children need health insurance
What is section 80D?
Section 80D of income tax act 1961 allows you to save tax on the payment of premium on health insurance, and expenses incurred on health checkups of your child. However, this section includes the premium coverage of you, your child, spouse, and parents.
Amount of deduction
You can avail deduction under section 80D for up to ₹25,000 for buying health insurance for your child. However, the overall deduction limit would be only ₹25,000, which also includes you, your spouse, child and parents.
READ MORE: Multi-year health insurance plan: What's in it for you?
Deductions on preventive health checkups
No disease can be cured when the doctor doesn’t know the disease itself. Disease can only be identified by way of health checkups, with the help of healthcare technology advancement that can cost you a lot. However, regular health checkup is necessary for a child to detect potential disease in advance to cure it as soon as possible. You can avail of the tax benefits on the expenses you incur on health checkups for up to ₹5,000
However, you need to remember that the amount of deduction will include both expenses on preventive health checkup and payment of health insurance premium. For instance, if you made the payment for ₹25,000 toward health insurance premium and ₹5,000 towards health checkups. Your deduction limit will be ₹25,000 only.
Being protective for your child and your family doesn’t mean you cannot have a mindset to save your hard-earned money. You have all the rights and government’s support to do the same. To promote the financial protection of the individuals and saving money for your financial stability, the Indian government has provided various tax benefits in Income Tax Act, 1961.
Anushka Trivedi is a freelance financial content writer. She can be reached at anushkatrivedi.com
