Health insurance can allow seniors to enjoy their golden years without financial stress. Continue reading to see how older citizens can save money on medical expenses by using Form 80D.
Senior citizens' medical costs are generally expensive since they are more prone to lifestyle and age-related ailments. Health insurance can allow seniors to enjoy their golden years without financial stress. In most circumstances, insurers are hesitant to provide medical insurance to elderly people who have pre-existing conditions. Seniors, on the other hand, can obtain coverage through a long-term policy. Premiums for senior citizen health insurance are frequently higher to reflect the insurer's risk.
The government of India revised Section 80D of the Income Tax Act of 1961 to make healthcare more accessible to senior citizens. Seniors' medical expenses are now deemed eligible for deductions for tax purposes. Continue reading to see how older citizens can save money on medical expenses by using Form 80D.
How To Save Tax On Medical Bills u/s 80D?
Many health insurance carriers refuse to provide health insurance plans to senior citizens who have pre-existing ailments, and their rates are kept higher because of their vulnerability to contracting a disease at that age. To assist them in surviving this age and living their golden years, tax deductions can be claimed on the medical expenses of family members 60 years of age or older, which includes you, your spouse, children, and dependent parents. Thus, senior citizens, 60 years of age and older, are entitled to tax deduction benefits on their medical expenses if they do not have it covered by any other existing health insurance policy.
Section 80D permits the policyholder to save tax by deducting medical insurance costs for self, spouse, and dependent parents from income before paying taxes. To be eligible to claim medical expenses, a person must be at least 60 years old.
What is The Tax Deduction Limit for Senior Citizens to Claim Medical Bills?
The Income Tax Act permits you to claim a maximum deduction of Rs 50,000 (as of FY 2021-22) for medical expenses spent in a fiscal year for the healthcare of senior citizens (qualified parents). As a result, if you are 60 years or older, you can claim a maximum tax deduction of Rs 50,000 on your medical expenses or health insurance premiums.
The Tax Deduction Limits Under Section 80D in Different Scenarios
In a fiscal year, the deduction under Section 80D is Rs 25,000. The deduction limit for senior citizens is Rs 50,000. The table below depicts the amount of deduction currently available to an individual taxpayer in fiscal years 2020–21 and 2019–20 under various scenarios:
|Scenario||Premium paid (Rs)||Deduction under 80D (Rs)|
|Self, Family, Children||Parents|
|Individual and parents below 60 years||25,000||25,000||50,000|
|Individual and family below 60 years but parents above 60 years||25,000||50,000||75,000|
|Both individual, family and parents above 60 years||50,000||50,000||1,00,000|
|Members of HUF||25,000||25,000||25,000|
Which Medical Expenses are Eligible for Tax Deduction Under Section 80D?
According to recent modifications to the Income Tax Act, expenses such as hearing aids, consultation fees, medicine, medical bills, medical devices such as pacemakers, and so on would be tax-deductible. Section 80D has a list of medical conditions; if your condition is not listed, you can claim the benefit under Section 80D. The highest deduction that can be claimed in a fiscal year is Rs. 50,000.
In addition, cash-paid medical bills will not be evaluated by the insurance plan. Payment for medical expenses must have been made with a cheque, debit card, net banking, or other similar methods. A cash payment of Rs. 5000 can be made for preventative health check-ups, which are checks to see if you are at risk of contracting an illness.
Documents Required to Claim Tax Benefits
The Income Tax Act does not specify a list of documents that must be submitted to claim a tax deduction. Documentary evidence, such as medical expense bills, medicine invoices, diagnostic test reports, medical history documents, doctor's prescriptions, and so on, should be saved.
Purchasing health insurance for your elderly parents should be your top priority since they deserve to enjoy a healthy life in their golden years. Buy health insurance policies that cover the needs of your entire family now!