Answer

1. F

   Facts

   The most consistently underused deduction in India. Sec 126, Income-tax Act 2025 (old Sec 80D) allows ₹25,000 deduction for own/spouse/children's health insurance PLUS another ₹25,000 (or ₹50,000 if parents are senior citizens) for parents' health insurance. Total potential: ₹75,000–₹1,00,000 in deductions ONLY from health insurance premiums. Available in OLD REGIME.

2. P

   Provisions and law

   • Sec 80D(2)
   • Sec 80D(3)
   • Sec 126 (old 80D) preventive health check
   • Sec 126 (old 80D), no policy needed for senior parents
3. A

   Analysis

   The full Sec 126 (old Sec 80D) matrix: Self + spouse + children (all below 60): ₹25,000. Self + spouse + children (any one is 60+): ₹50,000. Parents (both below 60): ₹25,000 additional. Parents (either parent is 60+): ₹50,000 additional. Maximum possible Sec 126 (old Sec 80D): (1) Self is 60+: ₹50K. (2) Parents both 60+: ₹50K. Total: ₹1L deduction from health insurance alone. At 30% bracket: ₹30,000 annual tax saved. Cash payment condition: Health insurance premiums: must be paid by cheque, bank transfer, net banking, UPI, credit card, NOT CASH. If paid in cash: Sec 126 (old Sec 80D) deduction denied. Only exception: preventive health check-up up to ₹5,000 within the Sec 126 (old Sec 80D) limit can be paid in cash. Group health insurance from employer: Employer pays premium for group health: no Sec 126 (old Sec 80D) to employee (employer's expense, not employee's).

4. C

   Conclusion

   1. 1List all health insurance policies: own family floater + separate parents' policy
   2. 2Confirm parents have separate policy (to claim additional ₹25K-₹50K parents' deduction)
   3. 3Check ages: self/spouse/children below 60 = ₹25K limit. 60+ = ₹50K limit. Parents 60+ = ₹50K.
   4. 4Verify premium paid by non-cash mode (bank/UPI/card). Cash premiums = deduction denied.
   5. 5Add preventive health check-up bills (up to ₹5,000) within the limit, cash allowed here
   6. 6Submit to employer: premium receipts + policy summary showing insured names

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