HOW A SENIOR CITIZEN CAN SAVE TAXES ON MEDICAL BILLS

Section 80d for senior citizens of the Income Tax Act of 1961 has guidelines regarding the tax benefits forsenior citizen medical insurance. The Law system of India considers a person as a senior citizen older than sixty. A person who pays health insurance premiums for their parents will be considered for tax benefits.

Limit of tax deductions for Mediclaim for senior citizens?

Senior citizens are eligible to claim an utmost reduction of approximately INR 50 000. The Income Tax Act has made this mandatory as of the fiscal year 2021-2022. This Mediclaim is available for healthcare purposes of senior citizens.

The deductions of tax as per Section 80D for senior citizen medical insurance are as follows:

• If a senior citizen pays the health insurance premium, they can enjoy up to a 50,000 INR tax deduction according to the Income Tax Act.
• If an individual pays the premium for their parents and their age is less than 60 years, they can enjoy a maximum tax deduction benefit of 75000 INR.
• If a senior citizen pays the health insurance premium for his parents, they can avail of a maximum tax deduction benefit of 100000 INR.

Section 80D and the maximum limits for a tax deduction

Section 80D for senior citizens states that senior citizens can claim up to 50,000 INR for their health check-ups, the premium of health insurance policy, medical expenses for themselves and their family members, and premiums of Central Government Health Scheme (CGHS). The maximum deduction limit of a tax is up to 5000 INR annually.

The tax deduction limit as per section 80D for medical purposes is as follows:

 

Detailed Criteria of tax benefits for senior citizens	Self, spouse, parents, and children are not senior citizens	Self, spouse, and children are not senior citizens, but parents are senior citizens	Self, spouse, children, and parents are senior citizens
Health insurance premium for self, dependent children, and spouse	25,000 INR	25,000 INR	50,000 INR
Parents Health Insurance premium including preventive health check-ups	25,000 INR	50, 000 INR	50, 000 INR
Medical bills (Self, spouse, and dependent children)	N/A	N/A	Up to Rs 50, 000
Maximum limit of tax deduction under section 80D	RS 50,000	Rs 75,000	Rs 1,00,000

 

Medical expenses included in tax deduction under section 80D

The Income Tax act has defined several diseases that are covered insenior citizens' medical insurance. However, all conditions will not be eligible for tax deduction under section80D. The amendment of the act has defined those medical expenses, including consulting with doctors, medicines and hospitalization expenses, and buying medical devices, will be considered for tax deductions.

However, there are some additions to Section 80D according to Section 80DDB. Section 80DDB includes several medical conditions and diseases, including cancer, AIDS, etc to provide income tax benefits for senior citizens. In case of these diseases, non-senior and senior citizens will get a deduction of up to INR 40,000 and INR 1,00,000, respectively.

Health insurance premium to avail of tax deduction as per section 80D

If you want to claim a deduction of the taxable amount, you should prefer using online payment modes while paying your health insurance premium. The case is the same if you are paying for medical expenses. Instead of cash, try to prefer paying the amount by credit card, debit card, net banking, cheques, etc.

On the other hand, paying preventive health check-up expenses is better to be paid in cash. Perioding health check-ups are necessary to protect yourself and your family from major diseases. Early diagnosis of any disease will provide you with the right treatment and early recovery from the illness as well.

Documents to be submitted for claiming tax benefits

There is no explicit mention of the necessary documents in the Income Tax Act that you must submit to claim the tax benefits to claim benefits on senior citizen medical insurance. However, you can prefer keeping the medical bills, medical test reports, tax invoices for medical expenses, prescriptions of doctors, etc., to claim the tax benefits.

Conclusion

The medical bills are essential if you file the income tax return for the coming fiscal year. If you are a senior citizen or have parents who are senior citizens, you can easily submit the proof of health insurance premiums that you pay for them to get tax benefits as per the Amended Income Tax Act.

FAQs

Q1. Can I get tax benefits on medical bills?

Ans: You can enjoy an exemption in tax limit of up to Rs. 15,000 excluding the regular medical expenses.

Q2. How can I claim medical expenses on tax if I am a senior citizen?

Ans: Section 80D mentions that a policyholder can get savings on tax amount if they claim senior citizen medical insurance that they pay for themselves, their spouse, or dependent parents.

Q3. What is the percentage of medical bills that I can claim on taxes?

Ans: Maximum deducted percentage will be 7.5% from the total amount of your total medical expenses. However, you can claim it if the expenses exceed 7.5% of the adjusted annual gross income according to the 80d benefit for senior citizens.