With advancing age, healthcare needs also tend to alter and increase. This is the reason why senior citizens require easy access to quality and affordable healthcare facilities.
However, this may prove to be financially burdensome under certain conditions, especially in the long run. But, you need to be aware that you can enjoy tax benefits u/s 80D of the IT Act on medical expenses if you are 60 years or above. This article will shed light on this aspect.
What is Meant by 80D of the IT Act?
Section 80D of the IT Act acts as a financial safeguard for tax savings both for individuals and families. It is the avenue for claiming tax deductions for expenses incurred toward premium payment for health policies and other costs incurred due to medical treatments. These benefits tend to grow with age as healthcare necessities are more utilised by older people.
| SCENARIO | PARENTS BELOW 60 YEARS (INR) | PARENTS ABOVE 60 YEARS (INR) | BOTH SELF AND PARENTS ARE ABOVE 60 YEARS (INR) |
|---|---|---|---|
| Tax Rebate Applicable for Spouses and Children | 25000 | 25000 | 50000 |
| Tax Rebate Availability for Parents | 25000 | 50000 | 50000 |
| Total Rebate | 50000 | 75000 | 100000 |
Benefits of Section 80D on Medical Expenditure
Senior citizens are eligible to receive special benefits on healthcare expenses u/s 80D of the Income Tax Act. Some of these major benefits include:
Peace of mind: Section 80D allows special benefits, especially for senior citizens, by opening the avenues for a tax deduction for expenses incurred towards health issues. This is a major relief considering the steep medical inflation rate.
Easy access to standard healthcare facilities: Possessing a health insurance policy is the doorway to easy availability and accessibility to quality medical facilities. Moreover, tax deductions on health insurance boost this trend further. This improves the overall quality of life and ensures regular health monitoring.
Ensure tax savings: With the help of Section 80D, senior citizens can reduce their income tax liabilities and enjoy more tax savings. They can claim deductions up to INR 25000 for premiums paid towards health plans and up to INR 50000 for medical expenses incurred. This aids in accumulating a considerable fund and ensures efficient finance management.
How can senior citizens save taxes with medical bills under Section 80D of the IT Act?
Considering the current rate of steep medical inflation, healthcare costs have risen significantly, especially for senior citizens, often making it a considerable financial burden. However, there is a respite in the name of Section 80D of the Income Tax Act.
This particular section allows senior citizens to claim tax deductions for expenses incurred towards premium payments for health policies and other medical costs incurred for themselves and their dependents.
With careful stratification, senior citizens can ensure substantial tax savings, ensuring enough healthcare support.
How do senior citizens get a tax deduction for health policy premiums under Section 80D of the IT Act?
In this case, it is advised that you pay for your healthcare needs or health insurance premiums using advanced online digital modes. Avoid using conventional cash payment options and rather use credit cards, debit cards, UPIs, mobile wallets, cheques, or net banking methods.
However, in the case of preventive medical health check-ups, you can use cash. Regular monitoring and check-ups are essential for ensuring smooth health.
Strategies for optimising tax deductions for senior citizens
Considering and implementing these strategies will help senior citizens ensure optimising tax deductions:
Choose comprehensive health plans
While selecting health policies, it is best to opt for comprehensive health coverage to ensure a comparatively wider coverage span. These types of health plans often offer higher premium limits that are eligible for tax deductions, thus increasing your income.
Include dependent parents
In case you are financially supporting your parents and they are dependent on you, it is best to cover them in your health plan. Therefore, costs incurred for premium payments, including their coverage, are also eligible for tax deduction under Section 80D.
Claim deductions on preventive medical check-ups
Senior citizens are eligible for tax benefits for costs incurred towards preventive health check-ups. This not only ensures efficient health management but takes care of your finances, too.
Split premium payment
If you are a part of a typical joint family, you should split the total premium payment amount for health plans. This allows individual claim deductions for each family member, thereby enhancing the overall tax benefits.
Utilising super senior citizen benefits
Any individual aged 80 years or above is regarded as a super senior citizen. They are eligible to enjoy higher tax benefits. Utilise this facility well to maximise your overall tax savings.
Senior citizen special medical deductions
Some of the most significant medical deductions specially designed for senior citizens include the following:
Alternative medical treatments
Health policies also cover alternative medical treatments like homoeopathy, Unani, Ayurvedic, etc. undertaken by any senior citizen. This enhances the overall coverage span, reducing your financial burden.
Coverage for preventive check-ups for dependents
You can also claim deductions for costs incurred due to preventive check-ups not only for yourself but your dependents as well. This will further expand the scope of tax savings.
Treating specific ailments
Section. 80D allows deductions for certain specific ailments, including critical illnesses. Ensure to understand the list of critical illnesses covered and then proceed accordingly.
Conclusion
When it is a matter of senior citizens, ensuring quality health management is as important as efficient finance management. If there is any avenue to reduce the expenses, it must be utilised to the full. Section 80D of the Income Tax Act offers such exclusive tax savings benefits, especially for people who are 60 years or above. The scope of this provision is quite large and careful consideration and planning are essential to ensure strategic tax savings on medical bills and medical insurance premiums.
