The Income Tax Act allows children to claim various tax benefits they have incurred on behalf of parents. If you have not claimed these you can make sure you do so from this year onwards. Here are some of these:
1) Health insurance premium paid for parents
If you have paid a health insurance for parents you can claim tax deduction under Section 80D of the Income Tax Act.
The sum of deduction could go up to Rs 30,000, which includes Rs 25,000 towards insurance premium and Rs 5000 incurred for regular medical check-up.
It's pertinent to note that, while you can claim deduction for the health insurance premium paid, there is no such benefit available for life insurance paid. So, any premium paid even by the children towards life insurance of parents is not eligible for tax deduction in India.
2) Deductions under sec 80DD of the Income Tax Act
In this case you can claim deductions of up to Rs 1,25,000 if your parents are suffering from severe disabilities. The deductions begin with a sum of Rs 75,000 and goes up in case of severe disabilities.
This however is not applicable only to parents, but, also to spouse, brothers and sisters and children of the individual who is incurring this expense. If your company is giving a reimbursement, than you can claim deductions of up to Rs. 15,000 from your employer for medical expenditure incurred.
The coverage will also includes purchasing a specified scheme or insurance for the purpose of maintenance of such dependent.
3) Spent on holidays of parents
The IT Act also allows you deductions for the LTA received and spent on your parents.
4) Benefits available to brothers and sisters
The claims of under Section 80 DD and 80 DD as mentioned above is also applicable for brothers and sisters.
It is extremely thoughtful of the government to extend the tax benefits to parents and sibling, especially those suffering from disabilities. As we head into Union Budget 2016, it is hoped that Finance Minister Arun Jaitley will increase the limits. Medical expenses have gone through the roof and it costs a lot for parents with severe disabilities.
A lot of the tax allowances and exemptions are barely enough. They must be revisited in the Union Budget to ensure that they are reasonable and in tune with times.
Let's wait for the Union Budget 2016 and see what is in store.