Tax Deduction under Medical Costs according to Section 80D of the Income Tax Act
Maximum Tax Deduction Under Section 80D for FY 2024-25
In the realm of personal finance, understanding tax deductions can be a significant boon. One such section that warrants attention is Section 80D of the Income Tax Act. This section offers tax deductions for healthcare expenses, making it an essential topic for those planning their financial strategies.
Let's delve into the maximum tax deduction limits under Section 80D for the financial year 2024-25.
For individuals, their spouse, and dependent children who are below 60 years of age, the limit is set at up to ₹25,000. However, if the same individuals have senior citizen dependents (60 years or older), the limit increases to ₹50,000.
The story doesn't end there. If the taxpayer themselves are senior citizens, they can claim an additional ₹50,000 for the health insurance premiums they pay.
Moreover, for parents who are below 60 years, the deduction limit stands at ₹25,000, and for senior citizen parents, it goes up to ₹50,000.
In a unique scenario where both the taxpayer and their parents are senior citizens, the combined maximum deduction can total up to ₹1,00,000 (₹50,000 for self/family + ₹50,000 for senior citizen parents).
It's worth noting that expenses on preventive health check-ups up to ₹5,000 can be included within the overall limit. Premiums for health insurance must generally be paid in a non-cash mode to qualify, except for preventive health check-ups, which can be paid by any mode.
If senior citizens do not have health insurance coverage, the expense incurred for their treatment can also be claimed under this deduction. Furthermore, the deduction for preventive health check-ups is in addition to the medical insurance premiums and medical expenses spent for the treatment of specific diseases.
Lastly, Section 80D allows a deduction for medical expenses or health insurance premiums paid for senior citizens, and it is applicable to both individuals and HUF (Hindu Undivided Family). Contributions to Central Government Health Schemes are also eligible for deduction under this section.
In summary, Section 80D of the Income Tax Act offers a flexible deduction limit for healthcare expenses, catering to various family situations and providing a valuable financial advantage for those seeking to manage their health and financial well-being.
[1] https://www.incometaxindia.gov.in/pages/default.aspx [2] https://www.cleartax.in/s/section-80d [3] https://www.bankbazaar.com/tax-saving-tools/section-80d.html [4] https://www.indiatoday.in/education-today/career-counsel/story/section-80d-tax-deductions-on-health-insurance-premiums-1731323-2021-07-01 [5] https://www.indiafilings.com/learn/income-tax-act/section-80d/
