Q. My parents are senior citizens. My father has subscribed to a group health insurance policy covering self and spouse (my mother) through a nationalised bank where he has a savings account.
The annual premium for this policy is paid through a cheque drawn on this account. If I make a deposit into this account towards the premium, can I claim deduction under section 80D?
T.S. Mahadevan
A. Under section 80D, an assessee can claim deduction for the health insurance premium paid by you for yourself, your dependants (spouse and children) and your dependant parents based on the limits prescribed. In your case, if you are going to pay the premium on behalf of your parents, then you can claim the benefit of the deduction up to ₹50,000 as they are senior citizens. Further, the insurance policy should be in the name of the person claiming the deduction.
Q. My daughter had taken a health insurance policy for her mother a few years back. Now, she has left for higher studies.
She has not claimed any deduction u/s 80D till date. Now, I want to know whether the premium paid by her can be claimed by her mother u/s 80D?
A.P. Jayarajan
A. Under section 80D, an assessee can claim deduction for the health insurance premium paid by him for self, dependants (spouse and children) and dependant parents based on the limits prescribed. In your case, only your daughter can claim the benefit based on the limits prescribed in the section. You may change the proposer’s name from that of your daughter to your wife’s for claiming the benefit in future and the payment done by your wife.
Q. I am a central government servant. I have invested ₹1 lakh in PPF and ₹50,000 in SBI Insurance. My NPS tier 1 deduction is ₹68,000. Will I be able to claim extra ₹50,000 benefit apart from the ₹1.5 lakh?
Amit Mishra
A. Under 80CCD(1B) of the Income Tax Act, any individual making a voluntary contribution to the prescribed pension fund / scheme shall be allowed a deduction of up to ₹50,000; this is over and above the limit of ₹1,50,000 under 80C that can be availed of.
Q. Is the education loan to fund studies abroad eligible for deduction under 80E? What is the document required for claiming the deduction?
Charan Kumar P. R.
A. Deduction under section 80E can be claimed for the interest paid on education loan for higher studies, including foreign studies, taken from any bank or approved financial institution or approved charitable institution, up to 7 assessment years from the year of repayment, making it eight assessment years.
Although there is no mention about any document, in the act or the rules, to be maintained, it is advisable to obtain a loan certificate from the financial institution clearly mentioning the interest and principal portion as a record to be preserved.
Q. My friend, a senior citizen, has medical insurance for ₹1 lakh. Recently, he had undergone a heart surgery, which cost him about ₹3 lakh. The insurance company paid him about ₹50,000. Could you please explain the procedure for claiming income tax deduction for medical expenditure under sections 80D, 80DD, 80DDB?
M.P. Kannan
A. Under 80D, in case of senior citizen, a deduction of up to ₹50,000 can be availed of for the medical insurance premium paid for self and dependants.
No other expenses incurred for surgery and medicines can be availed of as you are insured under Mediclaim policy. It is also to be noted that the benefit under sections 80DD and 80DDB cannot be availed of as they pertain to specific disabilities for dependants and self, respectively, such as autism, cerebral palsy, among others, and does not cover heart surgery.
(The author is partner, GSS Associates, Chartered Accountants, Chennai)