In response to our article: All You Wanted to Know About StarFirst Combi Plans; we received queries on the tax benefit an individual can claim on his/her health insurance premiums under section 80D of the Income- Tax Act, 1961. There seemed to be a lot of confusion on the exact amount that is permitted to be claimed under different scenarios. So, for the benefit of all, we decided to address the queries through today's article.
The Income Tax Act, 1961 suggests the maximum amount that can be deducted under section 80D in difference scenarios. Here's a snapshot:
Serial No. | Premium | Applicable provision under Income Tax Act | Whom can you pay for? | Can you pay in cash and still avail deduction under Income Tax Act? | Maximum amount that can be claimed under Income Tax |
---|---|---|---|---|---|
1 | Mediclaim Premium for your family (eldest member less than 60 years) |
Section 80D | Self, spouse and dependent children | No, you cannot | Rs 25,000 |
2 | Mediclaim Premium for your family (eldest member above 60 years) |
Section 80D | Self, spouse and dependent children | No, you cannot | Rs 30,000 |
3 | Mediclaim Premium (either mother or father less than 60 years) |
Section 80D | Parents (whether dependant or not) | No, you cannot | Rs 25,000 |
4 | Mediclaim Premium (either mother or father above 60 years) |
Section 80D | Parents (whether dependant or not) | No, you cannot | Rs 30,000 |
Source: PersonalFN Research
To elucidate the above table, let us understand the fundamentals in different scenarios:
Scenario | Health insurance premium paid and maximum tax deduction limits | Total Deduction u/s 80D (Rs) (c ) = (a+b) | |
---|---|---|---|
Self, spouse and dependent children (Rs) (a) | Parents (whether dependent or not) (Rs) (b) | ||
No one in your family has attained 60 years of age AND your parents haven’t attended 60 years age either | 25,000 | 25,000 | 50,000 |
The eldest member in your family (self, spouse and dependent children) is less than 60 years AND at least one of your parent (either mother or father) is above 60 years | 25,000 | 30,000 | 55,000 |
The eldest member in your family (self, spouse and dependent children) is above 60 years AND at least one of your parent (either mother or father) is above 60 years | 30,000 | 30,000 | 60,000 |
Source: PersonalFN Research
Some additional parameters to be kept in mind before claiming tax benefit under section 80D:
Remember, there is absolutely no reason to have insufficient mediclaim insurance. The costs you will incur on increasing medical expenses, as inflation continues and as you grow older, can be greatly reduced by the right and optimal insurance policy. And these savings can be channelized towards building a strong mutual fund portfolio that enables you to achieve your life goals faster. So, ensure to choose the right policy, and if you have any questions, on investing and insuring yourself optimally, don't hesitate to reach out to Certified Financial Guardian, who stands as a symbol of Trust and Respect.
PersonalFN is a Mumbai based personal finance firm offering Financial Planning and Mutual Fund Research services.
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