The correct answer is A. Premium paid by a client for health cover enjoys income tax deduction under 80.C of the Income Tax Act.
Section 80C of the Income Tax Act allows an individual to claim a deduction of up to Rs. 1.5 lakh in a financial year on the amount paid towards health insurance premiums. This deduction can be claimed for the premiums paid for the individual’s own health insurance policy, as well as for the health insurance policies of his/her spouse and dependent children.
The deduction under Section 80C is available for the premiums paid for a health insurance policy that meets the following conditions:
- The policy must be issued by a life insurance company that is registered with the Insurance Regulatory and Development Authority of India (IRDAI).
- The policy must cover the insured person for hospitalization expenses, including room rent, nursing charges, and medical expenses.
- The policy must have a minimum sum assured of Rs. 2 lakh.
- The policy must be in force for a minimum period of one year.
If the premium paid for a health insurance policy is higher than the maximum deduction limit of Rs. 1.5 lakh, the excess amount can be carried forward to the next financial year and claimed as a deduction in that year.
The deduction under Section 80C is available to all individuals, irrespective of their income. However, the deduction is not available to individuals who are covered under a government health insurance scheme.
The deduction under Section 80C can be claimed while filing the income tax return for the financial year in which the premium was paid. The deduction can be claimed in the form of a tax credit, which will reduce the amount of tax payable by the individual.
The deduction under Section 80C is a valuable tax saving option for individuals. It can help to reduce the tax liability of individuals and save them a significant amount of money on their taxes.
Options B, C, and D are incorrect.
Option B is incorrect because the premium paid towards health cover does not earn income tax rebate under sec.80D of the Income Tax Act. The deduction under Section 80D is available for the premiums paid for a health insurance policy that covers the insured person for specified diseases, such as cancer, heart attack, and stroke.
Option C is incorrect because the premium paid for a health cover does qualify for tax benefit under some provision of the Income Tax Act. As discussed above, the premium paid for a health insurance policy can be claimed as a deduction under Section 80C of the Income Tax Act.
Option D is incorrect because there is an upper limit to sum assured in a health insurance policy. The maximum sum assured that can be claimed as a deduction under Section 80C is Rs. 2 lakh.