Here's a look at these new rules and how much tax you would be able to save this financial year due to them.
Increase in tax benefit on health insurance premium paid for parents One of the announcements in Budget 2018 was raising the maximum amount on health insurance premium paid for senior citizens that can be claimed as a deduction from gross total income before levy of tax. As per the announcement, deduction limit for the health insurance premium paid for senior citizens has been raised to Rs 50,000 from the earlier limit of Rs 30,000.
This will not only benefit those senior citizens who themselves pay the health insurance premium but also those individuals who pay health insurance premium for their parents aged 60 years and above.
Earlier an individual who was paying health insurance premium for his/her spouse, kids and parents, could claim maximum deduction of Rs 55,000 (of premium paid) from gross total income before levy of tax. However, from FY 2018-19 onwards, he/she can claim a maximum deduction of Rs 75,000 under this section.
If both the individual and his/her parents are above 60, then from FY 2018-19 onwards, the maximum deduction available is Rs 1 lakh as compared to the previous limit of Rs 60,000 earlier.
This is how your tax-savings will be impacted if you claim the maximum deduction of Rs 75,000 at different tax slabs.
Abhishek Soni, CEO, tax2win.in, a tax-filing firm says, "If you have incurred medical expenditure on dependant senior citizen who is not covered under any health insurance policy, then also you can claim a deduction under this section. You can claim deduction for medical expenses up to Rs 50,000 in this case."
Increased benefit under section 80DDB for senior citizens Apart from increasing deduction on the health insurance premium paid for senior citizens, Budget 2018 also announced a hike in the deduction amount under section 80DDB. A deduction under section 80DDB is available to all resident individuals and HUFs for the expenditure on himself/herself or on dependants incurred due to specified illnesses.
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