Know how to avail Tax benefits on preventive health check-ups!

Know how to avail Tax benefits on preventive health check-ups!

Today’s lifestyle has become extremely inundated due to unhealthy and unorganised habits. This has led to an increase in health crises and also gives rise to several risky diseases. However, one can stay cushioned against such risks by going for a preventive health check. This helps in the early detection of any underlying disease, which can be treated and eliminated at the earliest. Also, apart from offering health coverage, preventive health check-ups can help you avail of tax benefits under Section 80D of the Income Tax Act.

This blog discusses how to avail tax deduction benefits on preventive health check-ups. 

What is a preventive health check-up?

No matter how hard we try to care for our health, we risk falling sick. Thus, a preventive check-up can help you detect and diagnose your conditions early. However, most of us tend to avoid or forget about the need for a health check-up – which sometimes results in an emergency admission, which might give a heavy dent in your pocket. So, getting yourself examined is the best way to prevent this. You can take a preventive check-up at regular intervals like – monthly, yearly, or quarterly, and is particularly important if you have reached the age of 40. You can also take a preventive check-up if you have a family history of critical illnesses such as diabetes, high blood pressure, etc.

Most comprehensive health insurance policies also cover preventive health check-ups. Also, having a comprehensive health insurance plan is important to ensure you are not alone in any stressful situation worrying about finances. 

Why should you go for preventive health check-ups? 

Below are some important features and benefits of preventive check-ups – 

  • Early detection of the disease: Preventive health check-ups allow you to detect any disease that might cause a heavy dent in your bank and pocket. You can take preventive measures upon the detection and avoid mental or physical stress. 
  • Reduce healthcare cost: It reduces any medical emergency cost, as treating a disease early is much more cost-effective. It also detects any underlying medical conditions with no symptoms and helps diagnose them at the earliest. 
  • Minimise the risks of complications: Taking necessary steps on time reduces the chances of complications in the future. Thus, a preventive health check-up will help you detect and diagnose any condition without delay. 
  • Tax benefits: If you spend on preventive health check-ups, you avail of tax deductions under Section 80D of the Income Tax Act. Hence, it will help with your finances as well. 

How to avail of Tax benefits on preventive health check-ups?

Spending on a preventive health check-up allows you a benefit under Section 80D of the Income Tax Act, 1961. Under this provision, you can avail of a tax deduction of up to Rs 5000 per financial year on the preventive health check. Also, this tax benefit can be availed for any preventive check-ups carried out for yourself, your spouse, parents, and dependent children.

You can claim a tax deduction even if you have paid the bills through cash. Note the same does not apply to the tax benefits one can get on the payment of health insurance premiums. This is because medical insurance requires you to pay premiums only via banking channels to avail of tax benefits.

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If you are less than 60, you can claim a maximum tax deduction of Rs 25,000, which goes up to Rs 50,000 if you are above 60. Also, you can benefit from tax deductions on your health insurance premium and preventive check-up bills. Let us explain the tax benefit with an illustration.

For example, you have spent Rs 20,000 on your medical insurance premium and Rs. 10000 on your preventive health check-up in the same financial year. In that case, you can avail of a tax benefit of Rs 5000 (Maximum deduction amount – Amount paid for premium, which is 25,000-20,000) on preventive health check-ups. The remaining Rs 5000 of the preventive health check-up has to be borne out of your pocket.

In addition to the deduction under Section 80D, you can also avail of other deductions such as Section 80DD for the medical expenses of disabled family members, Section 80DDB for treating certain medical conditions, and Section 80U for all the medical expenses for a handicapped person.

  • Under section 80D, you can claim an overall deduction of Rs 25,000 which is inclusive of the Rs 5000 for preventive check-ups for yourself or your dependent family.
  • You can also claim an additional tax deduction of up to Rs 25,000 for your parent’s health insurance if they are less than 60 years.
  • If your parents are above 60 years, then the deducted amount can go up to Rs 50,000.
  • Also, if you and your parents are above 60 years, you can claim tax benefits up to Rs 100,000. 

What are the documents required for preventive health check-up tax deduction?

You do not need documents to claim tax benefits on preventive health check-ups. This is because the Government has not mandated any documents under section 80D. Even though you don’t need any documents, keeping your medical bills and other medical documents handy while claiming the tax benefits is ethical and good practice. Also, as stated above, you must pay the medical bills in cash to avail of the tax benefit. 

A preventive health check-up with a medical insurance policy is important for your well-being. This helps you from any financial distress due to severe medical conditions. A preventive medical check-up helps you detect, diagnose, and treat any underlying condition at the earliest.

Whereas a health insurance plan covers the expenses that might occur due to the treatment of certain critical illnesses. Also, both of them help you avail of tax benefits, and it is mandatory to use the tax benefits offered by the Government on preventive health check-ups. You can buy comprehensive medical insurance and preventive medical check-up packages per your need and preference. Also, ensure to compare and check the plans before buying any. 

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

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