Government in Union Budget 2025 Tax deduction on health policy Is considering increasing the limit. Experts and representatives of the insurance sector had demanded Finance Minister Nirmala Sitharaman to increase the tax deduction available on premium. According to sources, the government is taking this demand seriously and an announcement in this regard can be made on February 1. This decision will provide a double benefit to taxpayers—first, they will be able to claim tax deduction on the entire premium of their health policy, and second, it will help them get better health cover.
How much deduction is available under Section 80D?
According to Section 80D of the Income Tax Act, the benefit of tax deduction is available on the premium of the health policy. currently:
- under 60 years of age An individual gets a maximum deduction of ₹25,000.
- 60 years or older This limit is ₹50,000 for senior citizens.
The government last increased the deduction limit on health policies in Union Budget 2015, when it was increased from ₹15,000 to ₹25,000. But this feature is only old tax regime Available only in.
How much can the deduction limit increase?
Tax experts say that keeping in mind the increase in health policy premiums after Covid-19, increasing the deduction limit is very important. As per suggestion:
- under 60 years of age For individuals, the deduction can be increased from ₹25,000 to ₹50,000.
- 60 years or older This limit can be increased to between ₹75,000 to ₹1,00,000 for senior citizens of Rs.
With this, taxpayers will be able to claim tax deduction on the entire premium amount of their health policy. Besides, this will also reduce the tax burden on them.
What will be the benefits of increasing deduction?
policybazaar.com According to Health Insurance Head Siddharth Singhal, the importance of health insurance has increased rapidly after the Covid pandemic. Insurance companies are launching new products keeping in mind the needs of the customers. In such a situation, due to increase in deduction limit on health policy:
- The burden on taxpayers will be reduced
People will be able to avail tax deduction on the entire premium of the health policy. Currently, despite paying higher premium, they can claim deduction only up to ₹25,000.
- Better health cover option
Currently, many people shy away from increasing the cover of a health policy because they feel that the premium will be high but the deduction will be available only up to ₹25,000. Increasing the deduction limit will encourage them to take higher cover.
- Promotion of insurance sector
Increasing the tax deduction limit will increase the demand for health insurance, which will strengthen the insurance industry.
Why is health insurance important after Covid?
The COVID-19 pandemic not only highlighted the rising cost of healthcare but also underlined the need for health insurance.
- Due to sharp increase in medical expenses, people had to spend their savings.
- Taking better health cover provides protection from unexpected expenses.
- Despite high premiums, people were not able to get adequate cover due to limited tax deductions.
Why is this step of the government necessary?
This proposed change will not only provide relief to individual taxpayers, but will also increase access to health insurance. People will be able to choose a better policy for the safety of themselves and their families.
possible changes Under this, the government is trying to make the health policy more affordable. This step will be beneficial for both taxpayers and the insurance industry.
