Chilies are excellent source of Vitamin, A, B, C and E with minerals like molybdenum, manganese, folate, potassium, thiamin, and copper. Chili contains seven times more vitamin C than orange. 

Ever since its introduction to India in 1498, chilies have been included in Ayurvedic medicines and used as tonic to ward off many diseases. Chilies are good for slimming down as it burns the calorie easily. Chilies stimulate the appetite, help to clear the lungs, and stimulate digestive system.

Capsaicin : Chilies have vitamin C and Vitamin A containing beta-carotenoids which are powerful antioxidant. These antioxidants destroy free radical bodies. Usually, these radical bodies may travel in the body and cause huge amounts of damage to cells. These radical bodies could damage nerve and blood vessel in diabetes. 

The antioxidants present in the chili wipe out the radical bodies that could build up cholesterol causing major heart diseases such as atherosclerosis. 

Chilies have antioxidants that can destroy cholesterol which could cause major disease like atherosclerosis and other heart diseases. Other disease like cataract and arthritis like osteoarthritis and rheumatoid arthritis. It also dilates airway of lungs which reduces asthma and wheezing. 

Detoxicants : Chilies acts as detoxifiers as they removes waste products from our body and increases supply nutrients to the tissues. It also acts as gastrointestinal detoxicants helping in digestion of food. 

Pain killer : Chilies stimulates the release of endorphins that are natural pain killers. It relieves pain caused due to shingles (Herpes Zoster), bursitis, diabetic neuropathy and muscle spasm in shoulders, and extremities. It also helps in relieving arthritic pains in the extremities.

Antibiotic : Chilies brings fresh blood to the site of the infection. The fresh blood fights infection. The white blood cells and leukocytes present in the fresh blood fights viruses. 

Brain : Capsaicin stimulates brain to excrete endorphin and gives a sense of pleasure when ingested. This is the reason people get addicted to chili. 

Cancer : It has been noted that vitamin C, beta-carotene and folic acid found in chili reduces the risk of colon cancer. Chilies such as red pepper have cartonoid lycopene, which prevents cancer disease. 

Heart Attack : Chilies have vitamin B6 and folic acid. The vitamin B reduces high homocysteine level. High homocysteine levels have been shown to cause damage to blood vessels and are associated with a greatly increased risk of heart attack and stroke. It also converts homocysteine into other molecules which is beneficial to lower cholesterol level. 

Lung disease : Chilies gives relief from nasal congestion by increasing the metabolism. It also dilates airway of lungs which reduces asthma and wheezing. It relieves chronic congestion in people who are heavy drinkers. 

Cigarette smoke contains benzopyrene which destroys the vitamin A in the body. The vitamin A present in chili reduces inflammation of lungs and emphysema caused due to cigarette smoking. 

source: http://www.chilly.in/chili_benefits.htm