15627In view of reduced inflation and expenses, will it be right to invest in IT stocks?

Premium paid towards health insurance policies qualifies for tax deduction under Section 80D of Income Tax Act 1961. The deduction is available to individuals on premium paid for self, spouse, dependent children and parents.

How does it work?

— Tax deduction of up to Rs 25,000 can be claimed on premium for self, spouse and children. Preventive check-ups like blood tests, full-body check-up up to Rs 5,000 are covered under this. You can claim a deduction of up to Rs 20,000 towards the premium paid and Rs 5,000 on preventive check-ups.

— You can avail additional deduction of Rs 25,000 on premium for parents. However, if parents are senior citizens, above 60 years of age, the maximum deduction is capped at Rs 50,000.

— So effectively, individuals can maximise tax benefit under Section 80D to a total of Rs 75,000.

Points to remember

— Avoid cash payments. The amount paid towards premium or preventive health check-up must be made via cheque, card or online banking.

— You cannot claim the 80D deduction if you are paying health insurance premium for your siblings.

— The group health insurance cover given by organisations are not covered under Section 80D.

— If senior citizens do not have health insurance, they can claim deduction on their medical expenses under 80D for up to Rs 50,000.