Things to know about Section 80D deductions of IT Act | Fusion - WeRIndia

Things to know about Section 80D deductions of IT Act

Things to know about Section 80D deductions of IT Act

Taxpayers can have the benefit of deductions under different sections of the Income Tax Act. However, most taxpayers claim the deductions under section 80C while ignoring the benefits under Section 80D.

Here are some important things to know about deductions under Section 80D of the Income Tax Act:

  • Section 80D of the Income Tax Act deals with deductions related to health insurance and medical expenditure incurred for self, spouse, children and parents.
  • An individual taxpayer can claim a deduction of up to ₹25,000 for the health insurance premium of self, spouse and dependent children. Besides, they can claim an additional deduction for the insurance payment of parents up to ₹25,000 if they are aged below 60 years, and up to ₹50,000 if they are aged above 60 years. The maximum deduction can be availed up to ₹1 lakh if both the taxpayers and their senior citizen parents are covered jointly. Any payment mode other than cash is accepted.
  • The health insurance plan should be approved by IRDA to avail the deduction.
  • In addition to that, a deduction to the extent of ₹5,000 with the overall limit of ₹50,000 can be availed for the preventive health checkups and medical expenditure. The payment can be made by cash also. This deduction can be allowed for the payment made for health checkup of self, spouse, dependent children and parents. However, medical expenditure is allowed if the person does not cover under health insurance.
  • While the maximum deduction allowed is ₹25,000 for the taxpayers and parents aged below 60 years, it is ₹50,000 if they are senior citizens.
  • Taxpayers can avail the benefit of deduction towards the payment made for their parents. However, payment made for siblings, grandparents, aunts or uncles, or any other relative cannot be claimed for a deduction.
  • Similarly, payment made for their working children also cannot be availed for tax benefit.
  • Group health insurance premium offered by the company or organization is not eligible for deduction.
  • If taxpayers and their parents make a part payment, both of them can claim to the extent of payment made by each.

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