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Tax eligibility in the case of insurance premium paid for Parents

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Income Tax Deduction for life insurance premium is available under section 80C of IT Act, 1961. Under this section premium paid to ensure your life, life of your spouse and any of your child is eligible for income tax deduction up to a maximum of Rs. 1, 00, 000.

As no specific deduction is available for parents under section 80C, the taxpayer will not be eligible for income tax deduction for the amount paid to ensure parents. If your parents are taxpayer and they have incurred the expenses to ensure there life then they will be eligible to claim deduction for insurance premium paid under section 80C of IT act. So it’s always suggested to pay life insurance premium from your parents pocket to get it claimed for income deduction under section 80C of IT act, 1961.  

Income tax eligibility in the case of insurance premium paid for ParentsFor medical insurance premium, Section 80D of IT Act has specifically included to allow the medical insurance premium paid for parents as an income tax deduction if certain specified conditions full filled by the taxpayer.

Here are the specified conditions;

  • The premium amount should have been paid in any mode other than cash. If it is paid by cash then the premium paid will not be eligible for income tax deduction under section 80D of IT act.
  • The insurer to whom you are making this payment should be an approved insurer (i.e. should have been approved by Insurance Regulatory and Development Authority).

As per the regular income tax deduction under section 80D of IT act you will be eligible for an income tax deduction of Rs. 15, 000 for the medical insurance premium amount paid to ensure your parents medical expenses.

If your parents are senor citizen then you can claim an additional benefit of Rs. 5, 000 as income tax deduction under section 80D of IT Act. This additional benefit is in addition to the standard deduction available for your parents. By this a total deduction of Rs. 20, 000 can be claimed under section 80D of IT act is your parents are senior citizen.

The deduction specified under section 80D of IT act is the maximum deduction one can claim under this section. If you have paid anything less then the amount specified in section 80D then the lesser amount will be eligible for income tax deduction.