The health insurance for parents provides tax benefits under section 80D of the Income Tax Act and Finance Act, 2018 also provides higher deductions for medical premiums paid for the health insurance of parents.
Age Criteria for Claiming Deduction
If in a family no one is above 60 then the deduction is upto to Rs 25,000 and the member of the is above Age then the deduction will be upto Rs. 25,000 hence the total deduction is claimable up to Rs 50,000.
In case only one of the parents is above 60 age then in this case tax benefit is upto 50,000 Rs only in the insurance paid for the parent is allowed, whereas in family or self, spouse and children premium paid in this you will enjoy Rs. 25,000 this makes total deduction available Rs. 75,000 every year.
Where one member of the family- spouse, self, or children is above 60 one can claim upto Rs. 50,000 for tax benefit on medical insurance.
Eligibility for Claiming Health Insurance Tax Benefit
One can check the given link of the income tax website to check the amount of deduction applicable for insurance payer under section 80D for the particular assessment year.
Documents Required for Claiming Health Insurance Tax Benefit
The paid receipt of premium and copy of the policy which shows the name of the family member and their relation and age, all of this information is needed to claim the deduction.
Benefits under Section 80C and 80D
- The benefit under section 80D of the Income Tax Act with the addition to Section 80C tax breaks of up to Rs. 1.5 lakh.
- The health insurance premium paid allows the payer for tax benefit for the number of years if insurance cover.
- Amount avail for senior citizen deduction can also be spent on medical expenses.
What is Section 80D?
HUF or any individual can claim for deduction under section 40D for their medical insurance which has been taken from the total income in any given year, and not only you take the benefit by only buying an insurance plan but also insurance plan will cover your spouse and your dependent (children and parents). Further one can take benefit of section 40D with the addition of section 80C, 80CCC, 80CCD.
Deductions under Section 40D
Things to Keep in Mind
- Premium paid on the behalf of the working child can’t be taken as a tax benefit.
- In case of part payment of premium from both you and your parents, then both can claim a deduction to the extent of paid by each.
- Payment can be made by any mode.
- The health insurance plan must be made as per the guidelines of Central Govt. and must be approved by IRDA.
- Group health insurance plan provided by the company is not eligible for deduction.
- Senior citizen means an individual resident in India who is the age of 60 or above during the financial year.
One should not only invest merely for saving tax, especially in the case of health insurance. With the rising expenses of the hospital, health insurance gives the biggest support.