Medical costs for senior individuals are often higher since they are more susceptible to lifestyle and age-related illnesses. Seniors with health insurance can enjoy their golden years without worrying about money. In most cases, insurers are wary of providing medical coverage to older persons with pre-existing diseases. Long-term policies, on the other hand, are available to seniors. Senior health insurance premiums are usually higher to reflect the insurer’s risk.
To make healthcare more accessible to senior folks, the Indian government altered Section 80D of the Income Tax Act of 1961. Medical expenses for seniors are now considered deductible for tax purposes. Continue reading to learn how Form 80D can help seniors save money on medical expenses.
How Can You Save Tax On Medical Bills Under Section 80D?
Many health insurance companies refuse to provide coverage to seniors with pre-existing conditions, and their rates are kept higher due to their increased risk of getting an illness at that age.
Tax deductions can be claimed on the medical expenditures of family members 60 years of age or older, which includes you, your spouse, children, and dependant parents, to help them survive and enjoy their golden years. Thus, senior individuals aged 60 and up are eligible for tax benefits on medical expenses if they are not protected by another health insurance policy.
Section 80D allows a policyholder to save money on taxes by deducting the cost of medical insurance for themselves, their spouses, and their dependent parents from their income before paying taxes. A person must be at least 60 years old to be able to claim medical expenditures.
What is the Medical Bills Tax Deduction Limit for Senior Citizens?
The Income Tax Act allows you to claim a maximum deduction of Rs 50,000 (as of FY 2021-22) for medical expenditures incurred for older persons within a fiscal year (qualified parents). As a result, if you are 60 years old or older, you can deduct up to Rs 50,000 in medical expenses or health insurance premiums.
The Section 80D Deduction Limits in Different Situations
The deduction under Section 80D is Rs 25,000 each fiscal year. For older folks, the deduction ceiling is Rs 50,000. In the fiscal years 2020–21 and 2019–20, the table below shows the amount of deduction currently available to an individual taxpayer under various scenarios:
Which Medical Expenses Qualify for a Section 80D Tax Deduction?
Hearing aids, consultation fees, medicine, medical bills, medical devices such as pacemakers, and other expenses would be tax-deductible under recent changes to the Income Tax Act. Section 80D provides a list of medical problems; if yours isn’t on the list, you can still claim the benefit. In a fiscal year, the maximum deduction that can be claimed is Rs. 50,000.
Furthermore, the insurance plan will not consider cash-paid medical expenditures. Medical bills must have been paid with a check, debit card, net banking, or other comparable manner. Preventative health check-ups can be paid for with a cash payment of Rs. 5000.
Documents Required for Tax Benefit Claim
There is no list of documents that must be supplied to claim a tax deduction in the Income Tax Act. Medical bills, medicine invoices, diagnostic test reports, medical history documents, doctor’s prescriptions, and other documentation should be maintained.
Your first goal should be to purchase health insurance for your older parents, since they deserve to live a healthy life in their golden years. Now is the time to purchase health insurance coverage that cover your complete family!