Given the rising costs of hospitalization, getting a medical insurance is a sound idea - in addition you also get tax benefits.
Your employer may have covered you and your family under a group medical insurance plan. The premium paid by your employer for you,
and even the premium paid to cover your family members, is tax free.
Medical Insurance For Self, Spouse, Children and Parents: In case you aren’t covered under a group medical insurance policy or wish to have
added coverage, you can buy a medical policy and reap certain tax benefits. Searching for the most suitable medical policy may be a good idea -
for instance, a particular insurance company may cover ambulance or post-hospitalization expenses to the full extent, another could cap it or not cover it at all.
Any claim settlement received whether under a group medical insurance policy or your own individual medical insurance policy is tax exempt.
Premium paid against the medical insurance policy that you have taken out, covering yourself, spouse and dependent children entitles you to a tax
deduction of up to Rs 25,000 per annum (or Rs 30,000 if you or your spouse are above 60 years) from your gross taxable income. If you insure
your parents, you get an additional deduction of Rs 25,000 (or Rs 30,000 if they are above 60 years). No such deduction is allowed for premium paid for
your parents -in-law.
CAUTION POINT: Don’t pay the agents in cash. Only cheques, drafts and net-banking make you eligible for tax deduction.
Preventive Health Check-ups: The maximum deduction possible is Rs 5,000 only, but you are eligible for it even if paid in cash.
CAUTION POINT: Further, this aggregate deduction of up to Rs 5,000 is covered under the overall basket for medical insurance premium.
Medical Expenditure Incurred For Very Senior Citizens: Very senior citizens are most of the time unable to get health insurance coverage,
but a considerable amount may be incurred on their medical treatment. Given the hardships, as a welfare measure, this year’s Budget allows a
deduction of up to Rs. 30,000 on account of ’medical expenditure’ incurred on very senior citizens.
CAUTION POINT: This deduction is available only if no medical insurance premium has been paid for the very senior citizen.