Tax savings Beyond Sec. 80C
We are pretty obvious about the Section 80C of the Income Tax Act, where we are obtaining a deduction of up to 1 Lakh from the taxable income. However, many of us the life insurance premium, PF, School fee, etc will consume the full limit of 1 lakh.
How to save more tax?
There are 3 different segments which communicate to medical expenditures and health insurance/med claim. A better understanding of this will surely assist you in considerable tax savings.
We have daily medical outlays. This might be on the way to a health insurance premium, or outflow associated with a family member’s incapacity/critical illness. The Income Tax Act of 1961 has prepared necessities to diminish this load through tax deductions under section 80D, 80DD, 80DDB.
Under this section, health Insurance Premium remunerated under a scheme enclosed by any broker permitted by the Insurance Regulatory & Development Authority (IRDA) can be cut up to 15,000 from your taxable income. For senior citizens, this limit is only up to 20,000.
Under this section, a person can claim cut for the health insurance premium compensated for individual, partner and children. He can also claim the cut till 15,000 for the health insurance premium compensated for his parents. Both the parents are senior citizens; this limit is up to 20,000. The age limit for senior citizen will be going up to 60 from the financial year 2012-13. So, the limit can surge up to 35,000 each year.
Current budget offers for a protective health checkup at a charge not beyond 5000/- throughout the year, but within these complete confines.
This is a deduction with regard to preservation expenditures including medical treatment of incapable reliant on.
The deduction is provided for the amount expended for partner, children, parents’ brothers or sisters of the persons. The next situation is that the incapacitated individual must be entirely or mostly dependent on the individual looking for the deduction for their support and maintenance. The reliant person must have incapacity of as a minimum 40%, and for claiming the cut the assessee has to provide a copy of credential delivered by the medical expert.
The following 2 expenditures are exempt under this section:
1. The outlay for the medical treatment, training, treatment, and therapy of the reliant
1. Amount remunerated/deposited under any system enclosed in this behalf by the LIC or any other broker or the superintendent or stated company and sanctioned by the Board in this behalf, for the support/maintenance of the reliant person.
A stable cut of Rs 50,000/- is permitted notwithstanding of amount experienced in Choice 1 or 2. Deduction of Rs. 1, 00,000/- is permitted if the dependent has the incapacity of over 80%.
This deduction is with regard to the medical treatment of a stated illness or disease as approved by the government. 80DDB deductions are provided for outlay gained with regard to evaluate himself or his dependent partner, children, parents, brothers/ sisters.
Assesse has to submit a certificate in form no 10-I from an approved expert working in a government hospital.
The eligibility for a cut in this section is the authentic expenditures subject to an extreme of 40,000/-. The limit is 60,000 in terms of senior citizens. If you are obtaining any compensation for this from your company/insurance firm, you will get only the balance.
This cut cannot be permitted by your company while computing the TDS amount. Thus, you need to apply for claiming this cut while filing the IT return.
The quantified sickness eligible under this section are
1. Neurological diseases where the disability levels are above 40%.
2. Malignant Cancers
4. Chronic renal failure
5. Hematological illnesses
A better comprehending of these requirements will assist us in obtaining more tax profits. If you know anyone, who can be profited under these sections.