A tax deduction of Rs 5,000 for expenses on preventive health care under section 80D was announced in Budget 2012 on Friday.
Finance Minister Pranab Mukherjee introduced another way to help save tax in the new financial year - by spending on health check-ups.
This includes various medical tests that patients undergo at hospitals. The new plan will be effective from 1 April 2012. In addition, the limit for Section 80DDB, allowing deduction for medical treatment of specified diseases and ailments, has been enhanced from Rs 40,000 to Rs 60,000.
The Budget has been lauded as showing more awareness and understanding on issues related to health care. Industry leaders have proclaimed it as a step in the right direction, as tax exemption to health check-up indicates a movement towards encouraging preventive healthcare.
Section 80D allows deductions for health insurance premiums paid up to Rs 15,000 per family (spouse, self and two children), and a further deduction of Rs 15,000 if a health policy is bought in the name of parents.
Parents who come under the category of senior citizens can get deductions up to a higher sum of Rs 20,000.