It is almost the time when one has to file his tax returns and if you have not yet done your tax savings then looking for some of the safest tax savings schemes can be your priority at the moment. The current economic scenario is propelling individuals to go in for instruments that provide safety and therefore they are bumping on everything from fixed deposits to insurance policies to ensure safe returns.
So a medical insurance could be an apt option for you at this time. Moreover the individuals who pay for the medical health insurance of their parents can also avail tax benefits in the new financial year. Therefore a medical insurance makes complete sense as it will not only help you to save tax but also guard you against high medical costs in case you come across an uncertainty. Just like tax saving under section 80 C of the Income Tax Act, one can also save tax for medical insurance under section 80 D of the Act.
Section 80 D
Section 80 D of the Income Tax Act enables one to save tax up to Rs 15,000 in respect of the medical insurance premium paid for himself, his spouse and the dependent children. Besides one can also avail tax deduction on the medical insurance premium paid for parents.
As per the new budget, tax deductions are allowed up to Rs 15,000 for medical insurance premium paid for parents. Further, the government has proposed that if either of the individual tax payer's parents, who has been medically insured, is a senior citizen/ 65 years or more of age, the deduction would be allowed up to Rs 20,000. Consult a tax attorney for your tax concerns.
Earlier also premium paid for medical insurance of parents were eligible for deduction but in that case parents had to be dependent. However the condition of dependency of parent has been removed from the financial year 2008-09. In other words, even if the parent is independent, the individual can pay the premium and claim for deductions under Sec 80 D. However it should be noted that to avail the tax benefit, one should not pay the premium in cash.