These days, there is a lot of competition in every aspect of business. Talented personnel have become incredibly hard to find and keep. It's challenging for many businesses to discover and keep competent employees. Offering them adequate health insurance coverage might be one of the best ways to keep them on board in such a situation. Group health insurance is one option for employers to provide comprehensive healthcare for their employees while also reducing costs. This plan may be the ideal choice if you are a business owner trying to offer your employees access to cost-effective healthcare.
At Raghnall, we offer group health insurance coverage to organisations, giving their employees a sense of security and keeping them motivated to work hard for the company in order to fulfil long-term goals. But frequently, both businesses and employees are unclear about how group health insurance affects taxes. The majority of them attempt to connect it to Section 80D of the Income Tax Act, which allows for a deduction for medical insurance premiums paid. And it's not entirely incorrect! Let's understand the application of Section 80D and the tax benefits of group health insurance which creates a win-win situation for both businesses and workers.
Following Are the Tax Benefits of Group Health Insurance:
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Employer tax benefits from group health insurance
Employers are permitted to claim the entire premium cost and take advantage of the tax benefit if they pay the entire premium on behalf of the employees. Any sum provided by the employer for the benefit of the employees will be regarded as profit in lieu of wages under the Income Tax Act. The health insurance premium payment in this case is referred to as "profit in lieu of salary." The premium sum is sometimes included in the category of general company expenditures. Different business structures, including sole proprietorships, partnership businesses, including public and private ones, etc., might profit from the tax advantages. Due to the tax advantages it offers, group health insurance helps both the employer and the employee. Along with this substantial health insurance, Raghnall also offers MSME, cyber security solutions, and D&O insurance for different businesses.
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Employee tax benefits from group health insurance
When an employee bears a portion of the insurance premium, the employee can use the amount paid to obtain a tax deduction under Section 80D of the Income Tax Act. However, the tax advantage cannot be greater than Rs 1 lakh in a fiscal year. Additionally, if an employee pays the entire insurance premium, they are eligible to deduct the full amount from their taxes under Section 80D as long as it does not exceed the maximum deduction of Rs 1 lakh. Another situation where the employer covers the whole insurance premium is one in which the employee is not entitled to any tax benefits for the premium sum that was paid on their behalf by their employer.
Raghnall, a corporate risk advisor and leading insurance broker in Mumbai, can help you effortlessly obtain the best group health insurance plans and employee benefits package for your business, where you can take advantage of tax benefits under a number of Income Tax Department sections. According to Indian tax laws, businesses that purchase group health insurance for their employees are excluded from paying some taxes. Hence, it's a win-win scenario for the both, since you can care for your staff while also enjoying significant tax savings with this plan.
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