Question

An assessee pays a medical insurance premium for himself and his family and claims a deduction while computing total income. What is the correct position under the Income Tax Act, 1961?

• A. Deduction is allowed subject to prescribed limits and conditions
• B. Deduction is allowed only for senior citizens
• C. Deduction is not permitted in such cases
• D. Deduction is allowed without any monetary limit

Hint:

Remember the pairing: Health Insurance Premium = Section 80D Deduction. The benefit is available, but only within prescribed limits.

Answer 1

The Correct Option is A

Step 1: Read the question.
A taxpayer pays a medical insurance premium for himself and his family and wants a deduction while computing income. We must find the correct position under the Income Tax Act, 1961.

Step 2: Find the law.
Section 80D of the Act gives deductions for medical insurance premiums paid for self, spouse, dependent children and parents.

Step 3: Check eligibility.
An individual can claim a deduction for the premium paid for himself and his family. Extra deduction may also be available for premiums paid for parents.

Step 4: Note the limits.
The deduction is not unlimited. It is allowed only up to the ceilings and conditions fixed in Section 80D. Higher limits apply in some cases like senior citizens.

Step 5: Check the other options.
It is not only for senior citizens. It is not denied, since Section 80D clearly allows it. It is not without any limit, since ceilings apply.

Step 6: Final answer.
So the deduction is allowed subject to prescribed limits and conditions.
\[ \boxed{\text{Deduction is allowed subject to prescribed limits and conditions}} \]