How can we save tax under section 80D?
Tax Planning is on. Just want to know the rules and limits of sections 80D in more detail. Can we avail deduction even if we buy a policy on the name of Parents, who are not dependent and what is the limit in that case?
Section 80D of Income Tax Act is a great way to save the tax. Medical or Health insurance are common now days. People in cities buy these insurance plans to mitigate the monetory crises.
You can save tax by following these steps:
- You are earning member, you can buy insurance policy for you, wife and childrens. Deduction is available upto 15,000.
- You can buy the insurance policy for your parents whether they are dependent or independent, the limit is 20,000.
- In case spouse is earning she can also buy policy for her parents and claim deduction of 20,000.
The policy should be bought by spouse whose income is higher. And parents should not buy the insurance policy if their childrens are earning. If parents buy they get deduction upto 15,000. If childrens buy the policy the deduction is upto 20,000.
This policy need to be purched other then cash mode to claim deduction u/s 80D of Income tax Act.