A deduction of INR one lakh and fifty thousand (1.5 lakh) from the total taxable income is permissible as a claim under Section 80C of the Income Tax Act, 1961. Hence, it provides an excellent way for individuals in India to reduce their tax liability. However, what most individuals fail to realize is that beyond 80C, there is much more to tax planning. There are other sections and methods which help you minimize your tax liability, and you have been ignoring them for a long time. Deductions under numerous other sections can help you enjoy tax-related benefits. One such part is Section 80D which is related to payment of premium for medical insurance.
Tax deductions of premiums paid on Medical Insurance are mentioned in Section 80D of the Income Tax Act, 1961. Any premium which is paid by you whether towards your medical insurance or that of a family member makes you eligible for tax deductions. For the medical insurance premium paid for children, spouse and self, a maximum tax benefit or deduction amounting to INR 25,000 can be claimed annually. Additionally, if you spend on the medical insurance premium on behalf of your parents, an additional deduction of INR 25,000 can be claimed by you. Senior citizens are allowed to claim a maximum tax benefit of INR 35, 000. This is because senior citizens are allowed a claim of INR 30,000 as per the given section and in addition to the same, an additional deduction of INR 5,000 can be claimed by them, thus increasing their claimable deduction up to INR 35,000 on the medical insurance premium paid during the particular financial year.
It won’t be wrong to say that ensuring you have a health cover for both yourself and your family is not just a necessity but is also something that can help you during times when you need it the most. It will help you by covering costs in case of a medical emergency and is also an additional way to get some amount of relief from your tax liabilities. Tax benefits nonetheless, can be claimed for every health policy which is purchased, either for self, parents, children or your spouse.
A detailed guide of benefits that can be availed under Section 80D
If you plan to file a claim under Section 80D, for tax deductions, you must keep in mind that there are certain exclusions. This will simply help keep any kind of confusion at bay.
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