Senior Citizen Health Insurance Tax Benefits Under Section 80D

As our loved ones age, their health becomes our top priority. However, with the growing years, rising medical expenses can create stress even with the most carefully planned finances.

Access to quality healthcare is not just necessary for senior citizens; it's a right! Thankfully, the government recognizes this need and offers meaningful tax benefits on medical insurance, easing the financial burden.

The tax benefit for health insurance is provided under section 80D of the Income Tax Act 1961. Let’s learn about what are these tax benefits and how much one can benefit from this section.

An individual who is more than 60 years but less than 80 years of age at any time during the financial year is considered a Senior Citizen for tax purposes of that particular year. Furthermore, a person above 80 years of age at any time during the year is regarded as a Super Senior Citizen for that year.

Below are the Section 80D deductions for the Senior Citizen Health Insurance Policy:

• People who pay their parents' health insurance premiums can claim additional health insurance deductions with 80D. You can claim up to ₹25,000 if your parents are under 60 years of age and you can claim senior citizen health insurance tax benefit of up to ₹50,000 if your parents are above 60 years of age.
• In rare cases, when the policyholder (you) is also above 60 years of age and has further insured his parents under health insurance, the deductible amount can be up to ₹1,00,000 (₹50000 for policyholder + ₹50000 for parents, both of whom are senior citizens).

The Income tax department lists no compulsory documents to claim health insurance tax benefits for senior citizens, but here are some documents you can keep handy for claiming the deduction:

• The receipts of premiums paid for the health insurance show the family members' names, relationships and ages.
• Receipts or copies of the expenses incurred due to preventive health checkups.
• Some other important documents can be medical bills, prescription bills, diagnostic test bills, etc.
• The health insurance policy document includes the names of the members insured, their ages, and their relation to the proposer.
• If parents are covered, check for an 80D certificate from the health insurance provider.

Some other documents essential in filing for an ITR include:

• Adhar Card
• PAN Card
• Form-16
• Bank Statement

Claim section 80D while filing Income Tax is simple. It just requires documentation of the payment made for the insurance premium and health checkups.

The claiming can be done in two ways:

• By providing proof of payment for medical expenses and insurance premiums to your employer.
• By directly claiming the deductions while filing Income Tax Returns (ITR)

Follow the below steps in case you are filing your ITR:

• Step 1: Visit the Income Tax Portal 
• Step 2: Create a new account or log in to your account to file the ITR. Fill in your required details.
• Step 3: To claim the deductions for senior citizen medical insurance premiums, visit the “Deductions” column on the ITR filing.
• Step 4: Select the condition under which you are claiming a deduction for yourself, your parents, spouse, children or siblings. In this case, you must choose the parents column.
• Step 5: Provide supporting documents, especially receipts for premiums paid and expenses for preventive health checkups. Once the documents are verified, you will receive the tax deductions.

Yes, senior citizens in India can save taxes on medical expenses under Section 80D of the Income Tax Act. This section allows deductions for health insurance premiums, preventive health check-ups, and medical expenses incurred for any illness.

The golden years of an individual’s life are precious and should be spent without worrying about financial implications, especially in medical emergencies. Thus, any medical bills or the premium paid towards a health insurance policy for senior citizens is eligible for tax deductions u/s 80D.

Other than the above-mentioned tax benefits of a health insurance policy, there are a few more cases where you can save tax by taking care of your senior parent's health.

Preventive Health Check-Ups

A maximum of ₹5,000 can be claimed for preventive annual health check-ups within the overall limit of Section 80D. This can include regular health check-ups, certain diagnostic tests, and vaccinations.

Deduction Under Section 80DDB

Section 80DDB of Income Tax exempts individuals or HUFs (Hindu Undivided Family) from the medical expenses for critical illnesses, such as Cancer, AIDS, or neurological problems for the individuals or their dependents (senior parents). 

Deduction Under Section 80DD

A dependent who is a person with a disability can undergo several expenses related to medical care, checkups, rehabilitation and training. These costs can be claimed under the section 80DD of income tax.

Individuals who oversee the care of differently abled senior citizens can also claim these deductions, provided that the dependent has not already received this tax benefit.

Certain exclusions apply to the section 80D of the Income Tax for senior citizens. Remember these points while filing a claim:

• You cannot claim for a premium amount paid for the insurance policy that was not paid during the fiscal year.
• If your employer covers you under group health insurance covering your senior parents, you cannot claim through 80D.
• If the premium amount is paid in cash for the health insurance, it is not eligible for deductions under section 80D.
• Medical expenses paid for family members who are not senior citizens cannot be claimed under 80 D.
• If you incur late payment charges or interests on the premium, such amounts are not eligible for deductions.