How Senior Citizens Can Save Tax On Medical Expenses Under Section 80D?

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The health of a person deteriorates as age increases. It is a well-known fact and hence, the reliance on medical support is higher during old age as compared to when a person is young. It is evident that a person will need increased medical assistance as their age increases. To ensure the right medical support is available without having to worry about finances, a health insurance plan is an essential safety net. Not only does it offer medical coverage, but also a financial shield.

But health insurance plans are available in different types; individual policies, family floater plans, critical illness plans, group insurance covers, and senior citizen plans are some to name a few. While each policy is suited for a specific purpose, a senior citizen policy is designed to ensure medical coverage for elderly individuals. Senior citizen plans typically cover the ailments that occur with old age. Moreover, at this age, when income sources are either limited or none, spending hard-earned life savings on medical expenses can be daunting. Typically, health insurance for senior citizens has a higher age range from 55 to 70 years. Thus, protection from soaring treatment costs can be sought even at such an old age.

However, financial coverage isn’t the only benefit that a senior citizen’s cover offers. It also offers tax benefits. This article discusses how senior citizens can save tax on medical expenses using health insurance cover.

What are the tax benefits available for senior citizens using a health insurance policy?

Health insurance plans apart from ensuring medical coverage and financial protection offer tax deduction in the income tax return. Section 80D of the Income Tax Act allows policyholders to claim a deduction. Moreover, tax laws also define a senior citizen as a person who is above the age of 60 years. Thus, a deduction is available for any premiums paid towards health insurance premiums by a senior citizen or not.

While the amount of such deduction is capped at ₹25,000 for people younger than 60 years, senior citizens can avail an increased amount of deduction up to ₹50,000. Thus, if you pay a premium for yourself, your spouse, or your children where either of the beneficiaries is over 60 years, you become eligible for such an increased amount of deduction of ₹50,000.

In another scenario where the premium is paid for parents as well as yourself via separate insurance policies, the aggregate amount of eligible deduction increases up to ₹1,00,000. The table below summarizes the benefits that are available:

Scenario  

Premium for and maximum deduction available

Aggregate deduction as per Section 80D
Policyholder, spouse, and children Parents, whether dependent or not
No beneficiary is a senior citizen Up to ₹ 25,000 Up to ₹ 25,000 ₹ 50,000
Policyholder, spouse, and children are below 60 years whereas parents are over the age of 60 years Up to ₹ 25,000 Up to ₹ 50,000 ₹ 75,000
Either policyholder or its spouse are a senior citizen and parents are also senior citizens Up to ₹ 50,000 Up to ₹ 50,000 ₹ 1,00,000

You must note that tax benefit is subject to change in tax laws.

Apart from health insurance premiums, deduction can also be availed for preventive health check-ups up to ₹5,000 as an internal sub-limit to the above amount. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.