Tax exemptions for expenses for family members' health strengthens Bharatiya family. Kudos to Arun Jaitley and NaMo for this act of dharma.

The deduction (amount exempted from tax) for medical insurance premiums has been raised from Rs 15,000 to Rs 25,000 a year. For senior citizens, the limit is up from Rs 20,000 to Rs 30,000. This is a welcome measure in view of rising premiums.

For very senior citizens (aged above 80), medical expenses up to Rs 30,000 can be deducted even if they do not have medical insurance. The aggregate deduction available to any individual on health insurance premiums and medical expenditure incurred on senior family members will be limited to Rs 30,000 under Section 80D.

Take an individual who pays a health insurance premium of Rs 21,000 for himself and his family, Rs 18000 as premium for his mother (a senior citizen), and Rs 15,000 on the treatment of his father (a very senior citizen).  

The total deduction under Section 80D will be Rs 51,000 (Rs 21,000 + Rs 30,000).

Further, Section 80DDB allows a deduction of up to Rs 40,000 on the actual expenditure on certain chronic diseases like cancer, AIDS, thalassaemia or haemophilia, incurred on oneself or a  dependent relative.

If the expenditure is for a senior citizen, the deduction will go up from Rs 60,000 to Rs 80,000. The taxpayer
will be required to obtain a prescription from a specialist doctor. Likewise, the limit on the deduction for maintenance of a disabled dependant under Section 80DD has been raised from Rs 50,000 to Rs 75,000 and, in case of persons with severe disabilities, it goes up from Rs 1 lakh to Rs 1.25 lakh under Section 80U.