A dependent is a person who gets financial support from someone who pays tax. The individual who relies on someone has to be related, most particularly they are spouses, children, or parents of the taxpayers. By claiming dependents on taxes, such taxpayers can benefit under the Income Tax Act of 1961.
Under Chapter VI-A of the Income Tax Act, you can get tax benefits if you spend money on medical treatment, education, or other essential needs. This means you can reduce your taxable income, which lowers the tax you need to pay.
You need to be one of the following to claim someone as a dependent:
The individual for whom the taxpayer is claiming the tax benefits, they should be entirely dependent on the taxpayer or HUF. Also, you can’t claim Sections 80DD (tax exemption on medical treatment) and 80U (tax deductions for people suffering from disability) separately. Only one taxpayer can claim the deduction for the same person.
You will get benefits from 3 different sections under the Income Tax Act while claiming someone as a dependent. Check the table to know in details:
| Section | Purpose | Details |
|---|---|---|
| Section 80D | Health Insurance Premium | You can claim a tax deduction of upto ₹25,000 for dependents younger than 60 years old and ₹50,000 for senior citizens for health insurance premium. |
| Section 80DD and 80DDB | For medical treatment | You can claim tax benefits on the medical expenses of dependents with disabilities under section 80DD.Claim deduction for the specified disease under section 80DDB. |
Follow these steps to claim deductions for dependents:
By optimising the terms and conditions of the sections, you can rightfully claim tax benefits for a dependent member of the family. But, ensure only one taxpayer from the family is claiming it or else you may be liable for penalties for incorrect claims.
1. Who qualifies as a dependent for tax purposes?
Someone who relies upon your financial support usually qualifies as a dependent for tax support. It can be your:
2. How can claiming someone as a dependent impact my tax return?
Under the Income Tax Act of 1961, you can claim someone as dependent and enjoy several benefits, such as:
There is no particular tax credit for dependents, but you can enjoy various deductions and exemptions under the following sections:
3. Can I claim my adult child as a dependent for tax purposes?
The idea is simple: anyone who depends on you financially is a dependent. If your children are adults and continuing their further studies, then they will be considered as dependents.
4. What other tax credits can I claim for dependents?
Under section 80D, you, as an individual or a member of the Hindu United Family (HUF), can claim a deduction of ₹25,000 on the insurance that covers you and your family. You can avail an added deduction of the same amount if your parents are over the age of 60.
5. Are there income limits for claiming dependents on my taxes?
There is no specific income limit. However, there is a particular deduction limit based on your age. If you are below 60 years old, then you can get a deduction of ₹25,000. If you are a senior citizen, then you can get a deduction of ₹25,000.
6. How do I claim a dependent if they live with me part-time?
If you mean someone who is dependent on you financially but lives away from home and visits sometimes, then the process is similar to any other dependent. For instance, if your child is in a hostel and you are providing for him or her, then you follow a similar method to get the tax benefits. For this:
