In the Indian taxation parlance, income tax exemptions are deductions or absolution given on the total income. This practice is nothing new. In fact, it goes as far as ancient times when Ashoka was ruling the Indian Mauryan empire. According to inscriptions , it is believed that income tax relief measures were in place for the people of Lumbini. They paid one-eighth of their total income as income tax instead of the usual one-sixth that the other people paid as taxes.
In the current scenario too, tax relief measures are in place in the form of tax exemptions and deductions. The Income Tax Act, 1961 provides for all such provisions and the annual budget announcement informs the taxpayers of any changes introduced. Under different sections, there are exemptions and deductions for a separate group of expenses or allocation. For example, Section 80D looks at health insurance and medical expenses. It provides guidelines on how your medical expenses, health check-up, health insurance, among other things can be claimed as expenses and the extent to which they can be available for deduction.
Let us look in detail what exactly Section 80D provides the tax deduction for:
Summarily, here is how the deduction goes:
Check your eligibility according to age and according to who all you are paying for, and plan your health expenditure accordingly for tax-saving purposes!
Hi, I am Ankit Sanghavi, I am a qualified Chartered Accountant and have been practicing since 2008. I am also a certified financial planner and regularly conduct seminars on tax audits, Value investment, GST implementation, and other topics. As a part of the tax series initiative by Canara HSBC Oriental Bank of Commerce Life insurance Company, I will be today taking up the topics of tax deductions; this video will help you assess your taxable income by saving money by savings in tax. To start with let's understand Section 80D.
Sec 80D is a section in the Income Tax Act which allows medical insurance payments to be claimed as a deduction from the gross total income of a taxpayer.
A deduction can be claimed on medical insurance payments made for self, spouse, dependent children & dependent parents.
The benefit is available to only Individuals & HUF - Partnership Firms, LLP, Trusts & Companies cannot avail deduction u/s 80D.
The maximum deduction that can be claimed by a taxpayer is Rs 25,000 (Rs 50,000 in case the taxpayer is a senior citizen). Further, a taxpayer can avail
additional deduction for medical insurance payments for their dependant parents.
Accordingly, if a taxpayer who is a non-senior citizen pays medical insurance for himself and his dependent non-senior citizen parents - the tax deduction that can be claimed is Rs 25000 + Rs 25000. In case dependant parents are senior citizens then the max deduction would be Rs 25000 + Rs 50000.
If the taxpayer and dependent parents both are senior citizens - the tax deduction would be Rs 50,000 + Rs 50000.
The above amount includes Rs 5000 for expenditure incurred on preventive health check-ups for self also.