Under the Central Board of Direct Tax (CBDT), there are nearly 5.89 cr people furnished their ITR on the new e-filing portal as of 31st December 2021. But the number, on comparing with the total population of 1 billion people, seems minute, however seeing the structure of Indian tax, the income of the proper number would not come beneath the eligible class. The government is giving advantages to those who file the taxes as every tax paid made them function the process easily and used to furnish the citizens with resources.
Thus to claim the benefits given by the Indian government for making the correct choice of investments and thus saving on the taxable incomes, this article will guide you to save the tax beneath section 80D of the income tax act 1961 that come up with so much of advantageous.
What is Section 80D?
Section 80D permits the assessee to claim the tax deduction on the premiums furnished for the health and medical insurance in the fiscal year. In a wider picture, it is an essential policy for your portfolio as it is used to furnish the rebates and saves you and your family that is self, spouse, parents, and dependent children, from any unexpected expenses that might be sustained for the ill-health. It is suitable for individuals and HUF, and claim alters with age.
Maximum Deductions Under Section 80D
Section 80D allows deduction of Rs 25000 for self-purpose and dependent children. But, for parents, it relies on their age. If they have an age of 60 years or exceeding, that is senior citizens, then the maximum tax break will be up to Rs 75,000, but when their age is below 60 years, the highest deduction is up to Rs 50,000. Moreover, when the assessee spouse and parents come beneath the senior citizen’s classification, Rs 100000 could be claimed as a full deduction.
| Insured | Deduction Age Below 60 Year | Deduction Age Above 60 Year |
|---|---|---|
| Self, Spouse, and Children | 25,000 | 50,000 |
| Parents | 25,000 | 50,000 |
| Max Deduction | 50,000 | 1,00,000 |
| Medical Expenditure (Against Bill) | – | 50,000 |
Parents Over 80 Years Age
If in case you have parents age is 80 years or above who do not have any existing health insurance policy and might be unable to afford that because of high premiums on pre-existing conditions, then section 80D of the income tax act comes to their rescue. A deduction would be availed of up to Rs 50,000 yearly for medical check-ups and treatments given they do not sustain the expenses themselves.
Medical Expenses Claim Under Section 80D
There is another criterion that comes beneath section 80D when the age of the parents is 60 or more and is not covered beneath any health insurance scheme. In this case, the eligible assessee would avail of the deduction with respect to the medical bills on the expenditure of Rs 50,000.
Health Check-Up Deduction Under Section 80D
The government is making aware the citizens of the subject of health and working for an effective and good lifestyle. Taking the same initiative forward in 2013-14, they executed a preventive health check-up deduction that makes people lessons the risk factors early by revealing the conditions and seeing a doctor regularly.
Hence, beneath section 80D, people would claim the deductions for the preventive health check-ups of Rs 5000. The amount would be claimed for themselves, their spouses, their dependent children, or their parents within the threshold of Rs 25000 for individuals and Rs 50000 for senior citizens. Moreover, the cash payments for the preventive health screenings are authorized for the exemptions.
No Tax Benefits on Cash Payment
It is not essential to understand that only medical insurance premiums furnished via non-cash modes are authorized for section 80D deductions of the income tax act.
Additional 80D deduction
Another cause Health insurance is essential is that it permits a tax deduction of Rs 5000 with respect to the expenses linked with the checkups of the whole family.
The Exclusions
There are some causes beneath which section 80D would not be responsible. These are the payment of health insurance premiums and medical expenditures in cash, expenses furnished on the grounds of working children, siblings, grandparents, or additional relatives, and lastly when the firm is incurring the cost beneath the group health insurance premium on grounds of the employee.
Brief About Section 80DD and Section 80DDB
Section 80DD is in the leading stage for all the disabled and/or specified persons and a tax deduction claim can be taken for the dependent spouse, children, parents, siblings of the policyholder. The restitution amount is based on the severity.
Apart from that, Section 80DDB offers benefits of the cost of treatment claims which are based on the dependant as well as the self for some of the diseases like cancers, chronic kidney diseases, etc. The person under 60 years would be getting a maximum deduction of INR 40,000 for both self or dependant and for the people more than 60 years they can claim INR 1 lakh.
All these are specified in the Income-tax Act. All these are important points to make remembrance of the health-based benefits on the medical and tax deductions. Therefore choose your health plan wisely.
