Tax has to be paid on the income you earn. Those whose income is not taxable can also avail the exemption given by the Income Tax Department by filing zero return. There are many ways to reduce tax for people whose income is taxable. You can also reduce income tax through insurance. There are many types of medical insurance in the market. In which different tax benefits are also available. In such a situation, it is important for you to know which medical policy you can buy so that you can save maximum tax.
Exemption is available in section 80D
If you want to claim tax exemption through medical insurance, then exemption can be taken under section 80D. Not under section 80C. Because by taking a medical policy, you can avail more benefits in addition to the exemption of Rs 1.5 lakh available under Section 80C.
No benefits will be available in the new tax system
The new tax system is a default tax system. By choosing which you do not get deduction of Chapter VI A. That means exemption is not available under section 80C and 80D. That means, if you choose the new tax regime, you cannot avail the benefits of medical insurance.
What is section 80D?
If you choose the old tax system, then the benefit of medical insurance can be availed under Section 80D of the Income Tax Act. Whenever you pay medical insurance premium for you or your family, tax exemption can be claimed for it. Family includes spouse, parents, dependent children.
How much discount will you get?
If you take medical insurance for yourself, your spouse or your dependent children, then a maximum rebate of up to Rs 25,000 can be claimed. Along with this, separate exemption can be claimed for parents. Which can be Rs 25 thousand. If the parents are senior citizens then this exemption limit increases to fifty thousand rupees.