For parents aged less than 60, there is an additional deduction of a maximum of 25,000 INR, and for those aged 60 and above, this amount increases to an additional 50,000 INR according to the budget of 2018. In situations where both the covered parent and the tax-paying individual are aged above 60, the maximum deduction under section 80D amount is capped at 1,00,000 INR.
There are three major deduction scenarios for Medical Insurance premium payments for the financial year 2018-2019:
- A taxpayer and his/her parents aged below 60 years. In this case, the medical insurance premium paid is the sum of 25,000 INR, which covers self, children, and family plus an additional 25,000 INR for parents. Deduction under 80D would be 50,000 INR.
- The tax-paying individual and family aged below 60, with parents aged above 60 years. Here, the medical insurance premium to be paid is the sum of 25,000 INR which covers self, children, and family plus an additional 50,000 INR for parents. Maximum deduction under 80D would be 75,000 INR.
- The tax-paying individual, family along with parents all aged above 60 years. Here, the medical insurance premium to be paid is the sum of 50,000 INR which covers self, children, and family plus an additional 50,000 INR for parents. Deduction under 80D would be the maximum available limit of 1,00,000 INR.
There is a new allocation for single premium Mediclaim policies as per the Union Budget of 2018. The provision enables a tax-paying individual to make a one-time bulk payment towards a Mediclaim policy which may have a single or multi-year validity. Under section 80D, such bulk payments towards health insurance policies can be claimed for deduction subject to the prior limits as applicable.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
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