Filing an Income Tax Return (ITR) is important and saving your hard earned money from the Income Tax Department (ITD) is equally important. Under the Income Tax Act (ITA), there are various sections that provide relief from the taxmen to an investor. Buying a medical or health insurance for parents is one such idea that helps you invest the money, which may go to the pockets of the ITD. As per the Income Tax norms, under Section 80D, one can avail tax exemption of Rs 25,000 if an income taxpayer has paid the mediclaim premium for his or her parents who are below 60 years of age. If the parents are senior citizen, the income tax exemption under the Section 80D rises to the tune of Rs 50,000. This exemption is in addition to the Section 80C investments of up to Rs 1,50,000 in a year.
Speaking on the mediclaim investment benefits a Mumbai-based tax and investment expert Balwant Jain said, “Under the Section 80D of the Income Tax Act, an investor who pays income tax is eligible to tax exemption for his or her investment of up to Rs 25,000 on family mediclaim. If the income taxpayer is paying the premium for his or her parents then he or she would get an additional tax exemption of up to Rs 25,000 if the parents are below 60 years of age. If the parents are a senior citizen or above 60 years of age, the additional tax exemption limit would go up to Rs 50,000 under the same ITD Section 80D.”
Elaborating upon the benefits of mediclaim premium payments of parents SEBI registered tax and investment expert Jitendra Solanki said, “If a person has bought an individual mediclaim policy for his or her family, one can avail income tax exemption on up to Rs 25,000 investment in mediclaim. However, one can increase this limit up to Rs 75,000 if he or she is paying mediclaim premium of his or her parents.”
Solanki said that the Income Tax Act’s Section 80D has been customised in such a way that an investor who is paying income tax can claim the standard deduction of up to Rs 50,000 that his or parents were entitled to claim when they were employed citing, “If parents are below 60 years of age and they are not paying their mediclaim premium, the Rs 25,000 exemption that parents are forfeiting goes into the kitty of their son or daughter. Similarly, when parents become senior citizen, their standard deduction of up to Rs 50,000 can be availed by their son or daughter if they agree to pay the premium for the health insurance of their parents.”