Have you ever claimed a deduction under Section 80D of the Income Tax Act, 1961?
What is Section 80D?
Section 80D pertains to amounts paid for health insurance premiums and preventive health check-ups paid for yourself, your spouse, your children and your parents. This section also includes medical expenses spent for parents who do not have an insurance policy.
The government offers a benefit for such expenses in the form of a deduction from your total taxable income for the year. The quantum of this deduction depends on the following factors:
- Age of the person for whom the amounts are paid
- The kind of medical expense you’re making, whether it is insurance premium, amount paid for a check-up or simply spent on medicines
- The mode of payment of such expenses (apart from preventive health check-up, all other spends must be made by a mode other than cash)
Let’s now take a closer look at this section, and the maximum deduction it offers.
Having a health insurance policy provides a necessary cushion in times of medical emergencies. Which is also why the government encourages us to put these basics in place through such tax benefits. It is important to note though that this deduction is only available if you opt for the old regime of tax. The new regime has done away with all exemptions and deductions and allows you to pay tax at a lower rate.
[To know more about the new regime versus the old regime, click here.]
Keep Your Finances in Good Health
As we near the end of the year, tax deadlines that once seemed far away are now looming large. If you haven’t filed your return for FY 2020-21 yet, do it now, before the festive cheer takes over.
And in case you are planning your taxes for the current financial year, keep Section 80D in mind. When your employer asks for proofs of investments, this is another benefit that you can make use of. All you need to do is submit the necessary details like the premium receipt and/or medical bills paid for parents.
Still have questions on your mind? Hit reply and we’ll help you out.
Until next time.
