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A Step-by-Step Guide for Mediclaim Policy Tax Rebate Filing

Posted On : 01 May 2024, 2 Weeks Ago. Blog Total Read 18

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In India, with rising medical costs, having a health insurance policy is not just a wise decision but also a financially prudent one. Moreover, the government encourages individuals to invest in health insurance by offering tax rebates under Section 80D of the Income Tax Act. This provision allows taxpayers to claim deductions on the premium paid towards health insurance policies. However, understanding the process of income tax India e filing for mediclaim policies can be confusing for many. Let us understand what mediclaim policy tax rebate filing is and how it works.

Understanding Mediclaim Rebate

Mediclaim rebate refers to the tax benefit provided by the government on premiums paid towards health insurance policies. This rebate is a deduction allowed from the total taxable income, which effectively reduces the tax liability of the individual or the entity paying for the health insurance.

How Does Mediclaim Rebate Work?

When you pay premiums for the best health insurance policy, you are essentially buying coverage for yourself and/or your family against medical expenses.

The premiums paid towards health insurance policies are eligible for tax deductions under Section 80D of the Income Tax Act in India. The maximum deduction limit varies based on factors such as age, type of policy, and other criteria.

For instance, in India, individuals below the age of 60 can claim a maximum deduction of up to ₹25,000 for the premiums paid for themselves, their spouse, and dependent children. Additionally, a deduction of up to ₹25,000 can be claimed for premiums paid towards the health insurance of parents (who are below 60 years of age). If your parents are senior citizens (aged 60 years or above), the maximum deduction limit is ₹50,000. Therefore, the maximum total deduction under 80D can go up to ₹75,000.

Furthermore, an additional deduction of up to ₹5,000 can be claimed for preventive health check-ups within the existing limit. Also, the amount claimed as a deduction under 80D reduces the total taxable income, which, in turn, reduces the tax liability of the taxpayer. This means you can save on your income tax by investing in health insurance policies.

Steps for Mediclaim Policy Tax Rebate Filing

Under the current regulations outlined in the Income Tax Act of 1961, health insurance or best mediclaim policy are eligible for tax deductions. Hence, investing in health insurance not only provides financial security for yourself and your family but also aids in reducing your overall tax burden. Some of the steps to ensure the tax rebate while buying mediclaim policies are:

Step 1: Choose the Right Health Insurance Policy

The first and foremost step is to choose a health insurance policy that suits your requirements. You should look for policies that offer comprehensive coverage and fulfill the criteria set by the Income Tax Act for claiming tax deductions. You must ensure that the policy covers you, your spouse, children, and parents, if applicable.

Step 2: Determine the Premium Amount

Once you have selected the policy, you need to determine the premium amount you have paid during the financial year. The premium paid for yourself, your spouse, children, and parents can all be included in tax deductions under Section 80D. Make sure to keep all the premium payment receipts handy, as you will need them while filing taxes.

Step 3: Understand Tax Deduction Limits

It is essential to understand the tax deduction limits prescribed under Section 80D. For people below 60 years, the maximum deduction permitted is ₹25,000. However, if you're paying the premium for your parents who are senior citizens (aged 60 years or above), the limit increases to ₹50,000. Additionally, an extra deduction of up to ₹25,000 is available if you're paying for health insurance for your parents who are below 60 years of age. Therefore, the total deduction can go up to ₹75,000 if you're paying premiums for yourself, spouse, children, and parents (including senior citizen parents).

Step 4: Keep Documents Ready for Filing Taxes

Gather all the necessary documents required for filing your taxes, including Form 16, PAN card, Aadhar card, and bank statements reflecting premium payments made towards your health insurance policy.

Step 5: File Your Income Tax Return

During the process of filing your income tax return, you will come across Section 80D, where you can claim deductions for the health insurance premium paid. Enter the relevant details accurately, including the premium amount paid for self, family, and parents.

Step 6: Verify and Submit

Once you've filled in all the required details, carefully verify the information provided to ensure accuracy. Any discrepancies may lead to delays or rejections in processing your tax return. After verifying, submit your tax return electronically.

Step 7: Keep Records for Future Reference<

After filing your taxes, make sure to keep copies of all the documents, including premium payment receipts and filed tax returns, for future reference. These documents may be required for audits or any future correspondence with the Income Tax Department.

Concluding Thoughts

Availing tax rebates on mediclaim policies is a valuable benefit provided by the government to encourage individuals to secure their health financially. You can efficiently file your tax returns and claim deductions on health insurance premiums and save on taxes. Remember, staying informed and organised is key to maximising your tax benefits while fulfilling your financial responsibilities toward healthcare. Niva Bupa stands out as one of the best health insurance company in India, offering comprehensive coverage and reliable services to ensure your peace of mind regarding medical expenses.

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