To get people to save in today’s environment is a tough job. In the olden days, people used to earn and save. They used their savings in case they needed to purchase anything. However, health insurance premiums the trends have changed now. With the opening of the economy, you have easy access to loans. This makes people go for the loans for procuring the same things their parents procured with savings. This has a negative impact on the cost of the product as well. The easy availability of the loans has made it easy for the manufacturers to increase the cost. Thus, the youngster of today ends up purchasing a highly inflated item. At the same time, he has to repay the loan in installments. This makes it impossible to save any amount for the times of need. Therefore, he requires an incentive to save. The Government of India has recognized this trait. Therefore, they have introduced concessions in tax when you pay premiums for health insurance. This has prompted people to save in the best mediclaim plan for tax saving.
The Income Tax Act 1961 includes several provisions wherein an individual taxpayer can avail of the concessions in income tax by paying the health insurance premiums. Sec 80D, 80DD, and Sec 80U enables you to avail deductions ranging from INR 50000 to INR 60000 in the amounts of wellness insurance premiums. The individual can take out policies for self, family, and parents. As per the tax planning, health insurance India schemes, he can avail exemptions up to an extent of INR 50000, in case the individual and parents are both below the age of 60 years. In case the parents attain 60 years, the exemptions increase to INR 55000. In the same vein, if the individual crosses the age of 60 years, he gets an additional exemption of INR 5000.
Health insurance premiums therefore, you can see people opting for the medical for tax planning purposes. This has a double effect. The individual gets benefits in tax deductions. In addition, he can utilize the health insurance amount in case anyone named in the policy document has to undergo hospitalization. The inclusion of the parents in this scheme is a good sign. This would also instill good values in the children and provide them with incentives to take care of their parents as well.
One more benefit of the health insurance for tax saving is that people inculcate the habit of savings albeit forcefully. This would bring a sea change in the attitude of the youngsters today. This savings would go a long way in reducing their expenses on health care. The insurance companies would be there to bear the costs. The burgeoning cost of the medical facilities today has made it impossible for the normal person to be able to beat it. He has to resort to health insurance. This factor has an automatic effect on the economy as a whole. That should form the subject matter of a completely different discussion altogether. That could give a new dimension to the debate.