Deduction u/s 80d
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
23 March 2016
A person takes a medical policy and pays Rs. 18800/- against premium. In this policy he himself, his father and mother (both are senior citizen), wife and his two children is covered. He takes another medical policy and pays Rs. 13400 /- as a premium. In this policy he himself and his wife covered.
What is the deduction amount u/s 80 D
What is the deduction amount u/s 80 D
Querist : Anonymous
Querist :
Anonymous
(Querist)
01 April 2016
please suggest what is the deduction amount
20 July 2024
Under Section 80D of the Income Tax Act, a taxpayer can claim deductions for medical insurance premiums paid for self, family, and parents. Here’s how the deduction would work based on the premiums mentioned:
### Deduction Calculation under Section 80D:
1. **For the First Policy (covering self, parents, spouse, and children):**
- Premium Paid: Rs. 18,800
- Deduction Limit:
- Maximum deduction allowed for individuals and their family (including spouse and children): Rs. 25,000
- Additional deduction for parents (if they are senior citizens): Rs. 50,000
- Considering parents are senior citizens:
- Deduction for family (self, spouse, and children): Rs. 25,000
- Deduction for parents (senior citizens): Rs. 50,000
- Total Deduction: Rs. 25,000 (for family) + Rs. 50,000 (for parents) = **Rs. 75,000**
2. **For the Second Policy (covering self and spouse):**
- Premium Paid: Rs. 13,400
- Deduction Limit (applicable for self and spouse only, irrespective of age):
- Maximum deduction allowed: Rs. 25,000
- Deduction: Rs. 13,400 (since it does not exceed the Rs. 25,000 limit) = **Rs. 13,400**
### Total Deduction under Section 80D:
- **Total Deduction** = Rs. 75,000 (from the first policy) + Rs. 13,400 (from the second policy) = **Rs. 88,400**
### Important Points to Note:
- The deduction under Section 80D is available for premiums paid towards medical insurance policies covering the taxpayer, spouse, dependent children, and parents (whether dependent or not).
- For senior citizens (aged 60 years or above), the maximum deduction limit for medical insurance premiums is higher.
- The deduction can be claimed for payments made through any mode, including cash.
- The actual deduction claimed cannot exceed the premium paid.
### Conclusion:
In the scenario described, the total deduction allowable under Section 80D for the taxpayer would be **Rs. 88,400**. This deduction can help reduce the taxable income, thereby lowering the tax liability for the taxpayer. It’s important to retain receipts and other documents as proof of premium payments, which may be required during tax assessment or scrutiny.
### Deduction Calculation under Section 80D:
1. **For the First Policy (covering self, parents, spouse, and children):**
- Premium Paid: Rs. 18,800
- Deduction Limit:
- Maximum deduction allowed for individuals and their family (including spouse and children): Rs. 25,000
- Additional deduction for parents (if they are senior citizens): Rs. 50,000
- Considering parents are senior citizens:
- Deduction for family (self, spouse, and children): Rs. 25,000
- Deduction for parents (senior citizens): Rs. 50,000
- Total Deduction: Rs. 25,000 (for family) + Rs. 50,000 (for parents) = **Rs. 75,000**
2. **For the Second Policy (covering self and spouse):**
- Premium Paid: Rs. 13,400
- Deduction Limit (applicable for self and spouse only, irrespective of age):
- Maximum deduction allowed: Rs. 25,000
- Deduction: Rs. 13,400 (since it does not exceed the Rs. 25,000 limit) = **Rs. 13,400**
### Total Deduction under Section 80D:
- **Total Deduction** = Rs. 75,000 (from the first policy) + Rs. 13,400 (from the second policy) = **Rs. 88,400**
### Important Points to Note:
- The deduction under Section 80D is available for premiums paid towards medical insurance policies covering the taxpayer, spouse, dependent children, and parents (whether dependent or not).
- For senior citizens (aged 60 years or above), the maximum deduction limit for medical insurance premiums is higher.
- The deduction can be claimed for payments made through any mode, including cash.
- The actual deduction claimed cannot exceed the premium paid.
### Conclusion:
In the scenario described, the total deduction allowable under Section 80D for the taxpayer would be **Rs. 88,400**. This deduction can help reduce the taxable income, thereby lowering the tax liability for the taxpayer. It’s important to retain receipts and other documents as proof of premium payments, which may be required during tax assessment or scrutiny.
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