Under Section 80D, the premium that you spend on insuring your, your spouse’s and your children’s health is exempt from tax, upto a limit of Rs 15 thousand, if you are less that 60 years of age and Rs 20 thousand, if you are more than 60. What’s more? You get an addition exemption on premium if you insure your parents’ health-Rs 15 thousand if your parents’ age in lower than 60 and Rs 20 thousand, if he/she is over 60 years of age. 

 

Under Section 80DD, medical expenses you incur on treatment of your handicapped dependents including parents, spouse, children and siblings, is exempt from tax upto Rs 50 thousand and Rs 1 lakh if the handicap is more than 80%, called severe disability. Disabilities covered include blindness and vision problems, leprosy-cured, hearing impairment, locomotor disability and mental retardation or illness.

 

Under Section 80DDB, expense incurred for specific diseases are exempt to a limit of Rs 40 thousand if you are less than 60 years of age and upto Rs 60 thousand if you are above 60. These illnesses include neurological diseases, where the disability level has been certified as 40% or more, parkinson’s disease, malignant cancers, Acquired Immune Deficiency Syndrome (AIDS), chronic renal failure, haemophilia and thalassaemia.

 

Key points to know

• For each of the disabilities, you need to produce disability certificates issued by the Central and the State Government medical board and receipts of expenses. For Sec 80DD and a certificate from a specialist working in a government hospital, for Sec 80DDB.

• If you have been reimbursed expenses by your insurer or your employer, you cannot claim deductions. In case of partial reimbursement, balance can be used for deduction.

• In case your disabled dependent for whom you bought the insurance policy dies, you will be returned the policy amount, which would be considered as your income and would be fully taxable.