How Senior Citizens Can Save Tax With Medical Bills Under Section 80D?
Mr. Charanjeet Singh is a pensioner (senior citizen) and lives with his family. Mr. Singh has a health insurance policy that offers him to enjoy tax benefits with medical bills. In this article, we are going to illustrate how people like Mr. Singh (above 60 years) can save on income tax by availing tax benefits on healthcare expenses under Section 80 D of the Income Tax Act.
Under Income tax section 80 D, any medical expenses or health insurance premium paid by a person for his/her parents or by a senior citizen himself are eligible for income tax benefits.
The Income Tax Act encourages you to claim a medical expense deduction for up to Rs. 50,000 (FY 2021-22) in a financial year. If you are 60 or above, you may get the benefits of tax deductions for medical expenditures or paying health insurance premiums up to Rs. 50,000.
Let’s take a look at income tax exemption for senior citizens under Section 80D
| Individuals paying health insurance premiums | Tax deduction under 80D | Maximum Tax deduction under 80D |
| If the senior citizens pay the insurance premium himself | For individuals: NA
For Senior citizens: Rs. 50,000 |
Rs. 50,000 |
| If you are below 60 years but your parents are above 60 | For individuals: Rs. 25,000
For Senior citizens: Rs. 50,000 |
Rs. 75,000 |
| If you are your parents are above 60 | For individuals: Rs. 50,000
For Senior citizens: Rs. 50,000 |
Rs. 100000 |
If you are a senior citizen, then you can claim up to Rs. 50,000 for medical expenditure under Section 80D. These medical expenditures could be your preventive health check-ups, health insurance premiums, and healthcare expenses for you and your family members. But the max tax deduction for preventive health check-ups is Rs. 5000 per financial year. This limit is included under the entire tax deduction amount i.e.. Rs. 50,000.
Let’s take a look at senior citizen tax exemption under 80 D
| Particulars | Maximum Tax deduction limit under Section 80 D |
| Health insurance premiums for self, spouse, and children (Rs. 5000 preventive health checkup amount is included) | For Self, spouse, dependent children are non-senior citizens and parents are also non-senior citizens: Rs. 25,000
For self, spouse, and dependent children are non-senior citizens, but parents are senior citizens: Rs. 25,000 For self, spouse, and both dependent children and parents are senior citizens: Rs.50,000 |
| Health insurance premiums and preventive health checkups for parents | For Self, spouse, dependent children are non-senior citizens and parents are also non-senior citizens: Rs. 25,000
For self, spouse, dependent children are non-senior citizens, but parents are senior citizens: Rs.50,000 For self, spouse, and both dependent children and parents are senior citizens: Rs. 50,000
|
| Healthcare bills for self, dependent children, and Spouse | For Self, spouse, dependent children are non-senior citizens and parents are also non-senior citizens: NA
For self, spouse, dependent children are non-senior citizens, but parents are senior citizens: NA For self, spouse, and both dependent children and parents are senior citizens: Covered within the Maximum tax limit of Rs. 50,000 |
| Healthcare bills for parents | For Self, spouse, dependent children are non-senior citizens and parents are also non-senior citizens: NA
For self, spouse, dependent children are non-senior citizens, but parents are senior citizens: Covered within the maximum tax limit of Rs. 50,000 For self, spouse, and both dependent children and parents are senior citizens: Covered within the Maximum tax limit of Rs. 50,000 |
| Maximum Tax deduction limit under Section 80D | For Self, spouse, dependent children are non-senior citizens and parents are also non-senior citizens: Rs. 50,000
For self, spouse, dependent children are non-senior citizens, but parents are senior citizens: Covered within the maximum tax limit of Rs. 75,000 For self, spouse, and both dependent children and parents are senior citizens: Covered within the Maximum tax limit of Rs. 100000 |
Documents Required for the Benefits of Income Tax for Senior Citizens Pensioners
- Bills of healthcare expenses
- Medicine invoices
- Doctor’s prescriptions
- Diagnostic test reports
- Documents regarding medical history
What Medical Expenses are Eligible for Tax Deductions Under Section 80D?
If any disease/illness is not mentioned in the Income Tax Act, then you won’t get coverage for that particular disease under Section 80D. But expenses including doctor’s consultation, medicines, hospitalizations, medical equipment such as pacemakers, hearing aids, etc. will be considered for deductions according to the government rules.
Along with Section 80 D, certain healthcare diseases and conditions are covered under Section 80DDB. Diseases like AIDS, Cancer, Parkinson’s disease, etc. belong to this category. According to this section, a non-senior person can enjoy the benefits of Rs. 40,000 while a senior citizen can claim up to Rs. 100000. If your healthcare bills for the disease come under this category, then you can initiate a claim under this 80DDB.
But if your disease doesn’t fall under the category of 80DDB or the claim amount gets exhausted, then you can claim the remaining expenditures under Section 80D.
Mode of Payment for Health Insurance Premiums
To enjoy claim deductions for medical expenditure for senior citizen parents, you must pay online your health insurance premiums. Never use cash mode of payment, you may opt for debit card, credit card, net banking, cheque payment, etc. You can use digital payment modes such as UPI, mobile wallets, etc. to pay your premium expenses.
You can use cash to pay for preventive health checkups. Preventive health checkups should be done periodically to safeguard yourself from any exposure to a disease.
Conclusion
While submitting your income tax return, never forget to include these medical bills at the end of a financial year. If you are taking care of your elderly parents or are a senior citizen, then you can claim these medical bills under the 80 D Income Tax Act.
