How to Save Tax with Preventive Health Check-Up Deduction

Any medical emergency that involves heavy expenses can put you through a financial crisis. Health Insurance is critical if you want to avoid the situation. You can cover your medical expenses with a good insurance policy by paying a nominal premium every year. To encourage availing of medical insurance, a tax deduction is allowed under Section 80D of the Income Tax Act 1961. The deduction available is Rs. 25000/- if you are below 60 years of age and Rs. 50000/- if you are a senior citizen. And with a preventive health check-up deduction, you can maximise your tax savings.

Why wait till a medical emergency arises?  You can avoid the onset of a medical condition with preventive health check-ups. But given the economic situation, health care is a major expense for many of us. Although this is the best way to be fit and healthy, most of us do not venture for it. The reason is the high cost of the tests. Fortunately, preventive health check-up deduction is available under Section 80D of the Income Tax Act 1961. You can avail of preventive health checkup tax benefits up to Rs. 5000/-  for medical expenses incurred for regular health check-ups. You are eligible for preventive health check-up exemption even if you are not covered under any medical insurance. This was a move by the government to encourage regular health check-ups for the upkeep of both physical and mental well-being.

Understanding Preventive Health Care 

Preventive health care is a way to secure our health and financial future. It involves measures taken to prevent the development of any disease, and early detection and treatment of any medical condition or disease. Preventive health care includes:

• Immunisations against infections
• Maintaining a healthy diet
• Maintaining a healthy weight
• Regular Exercise
• Avoiding tobacco and alcohol abuse.
• Screening and treatment for chronic diseases or cancer
• Lifestyle changes to manage conditions like heart disease or diabetes.

Is Health Insurance Mandatory to Avail of Preventive Health Check-Up Deduction?

You are eligible for preventive health checkup tax benefits without medical insurance coverage. However, to avoid a financial crisis and save money, Having a health insurance is important. Most health insurance plans now cover some form of preventive health care. The coverage varies with the plan you choose. Before you finalise the insurance policy, check for the preventive care coverage under the specific policy. You can claim the expenses incurred for health checkups during the renewal of the health insurance policy. Insurance companies provide various packages under preventive health care. They are:

• Cancer Package
• Dental Package
• Cardiac package
• Diabetes Package
• Family Package
• Children Package

The expenses incurred for any of the health check-ups are eligible for tax exemption. Now you can stay healthy while maximising your tax savings. 

Why is Preventive Health Check-Up Necessary?

Besides preventive health check-up exemption, you can derive other benefits like:

Avert medical complications

The time-lapse in detecting a medical condition and treatment may end up being fatal. Timely detection through preventive health check-ups is crucial to avert the situation. You can claim the expenses incurred during the renewal of the health insurance policy. Preventive health check-up exemption will further ease your burden.

Timely detection of medical conditions and diseases

Early detection will enhance the chances of reversing the condition. Regular health checkups will not bother you monetarily. Preventive health check-up deductions and an insurance claim will take care of the expenses.

Cost factor

You can avoid hospitalisation with early detection. This will reduce the medical expenses incurred for the treatment. It will be more cost-effective with tax benefits.

Medical conditions can be detected before the onset

Medical conditions like high blood pressure, diabetes, and high cholesterol can be prevented with regular health checkups.

What is Preventive Health Check-up under Section 80D and Who is Eligible?

You can claim a deduction for health insurance premiums under Section 80D of the Income Tax Act 1961. Preventive health check-up deduction is included under Section 80D. It includes expenses incurred for the health check-up of self, spouse, dependent parents, and children. If you are eligible for a preventive health check-up tax benefit, you should go for it. You can claim the benefit when you are filing your income tax returns. 

What is the Maximum Claim Eligible under the Preventive Health Checkup Tax Benefit?

Annually you can avail of a maximum benefit of Rs. 5000/- under the preventive health checkup tax benefit. You can claim exemption up to Rs. 5000/- for the expenses incurred for health checks of the self, spouse, and dependent children and parents at the time of filing income tax returns. Health insurance premium exemption is permitted only for payments through permitted channels. But for preventive health check-up deduction, cash payments made are also eligible for deduction. 

However, conditions are applicable for the preventive check-up tax benefits. The maximum eligible limit is Rs. 25000/50000 under Section 80D. This includes medical insurance premiums and the preventive health check-up exemption. For instance, if you are eligible for Rs. 25000/- and the medical insurance premium is Rs. 24000/-, the eligible amount under the preventive health check-up tax benefit will be Rs. 1000/- only. 

Points to Remember While Claiming Preventive Health Check-Up Exemption

Be aware of the following points of claiming preventive health checkup deduction while filing IT returns:

• Even if you are covered for preventive health check-ups under more than one insurance policy, the maximum deduction you can claim is Rs. 5000/-
• You should preserve the bills/receipts of all the health check-ups.

Conclusion

Regular health check-ups for early detection of potential medical conditions and diseases are the best way to lead a healthy life. With medical insurance covering the preventive health check-up expenses, your budget will be intact.

You can claim the expenses incurred at the time of policy renewal. Obtaining a separate preventive health check-up coverage for you and your family is possible even if your regular medical insurance does not provide for it. Additionally, you can avail of preventive health check-up deduction under Section 80D of the Income Tax Act 1961 at the time of filing your tax returns. 

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