How Medical Bills Can Help Senior Citizens Save Tax?

The law, the schemes, and everything else in the modern day are known to be uplifting and supportive to the older part of society – them being senior citizens. Well, for instance, senior citizens are given a higher rate of interest with their fixed deposits. Similarly, there are various other benefits for senior citizens.

The most important thing, though, is that you would have to know all of the advantages out there. One of them is the tax exemptions with your medical bills. Let’s find out everything about it, shall we?

Medical Costs are a By-Product of Getting Old

Medical costs for seniors are often higher since they are more prone to lifestyle and age-related diseases. Seniors with health insurance can enjoy their golden years without financial worry.

Most insurers are reluctant to provide medical insurance to older persons with pre-existing diseases. Seniors, on the other hand, can get protection through a long-term policy. Senior citizen health insurance premiums are usually higher to reflect the insurer’s risk.

Section 80D of the Income Tax Act of 1961 was updated by the Indian government to make healthcare more accessible to senior folks. Medical expenses incurred by seniors are now deductible for tax purposes.

Who is Eligible for the Section 80D Deduction?

Medical expenses incurred by any individual for himself or a family member who is a senior citizen are deductible under 80D Deduction. Medical expenditures paid for the individual’s senior citizen parents are also deductible.

A senior citizen is defined as someone over the age of 60. In addition, the term “family member” refers to the husband or dependent children. The Deduction is only available if such individuals are not covered by any medical health insurance coverage.

The clause is primarily intended for senior individuals who incur medical expenses but lack backup medical insurance coverage due to exorbitant health insurance premiums. As a result, the new rule will exclude them from income tax liability.

The act does not specify the types of medical expenses that are covered. However, hospitalization and routine medical expenses such as medicines and consultation costs, as determined by an expert, will be included for this reason.

How many deductions Can You Claim?

The act specifies a maximum limit of Rs.50,000 for medical expenditures incurred by older citizens or their family members. However, there is an additional restriction of Rs.50,000 if medical expenditures for senior citizen parents are paid.

As a result, if you are more than the age of 60 – you could claim a maximum deduction of Rs.50,000 on your medical expenses. Furthermore, if you have incurred medical expenses for your parents (age 60 or older), you can claim an extra deduction of up to Rs.50,000.

Section 80D provides an overall limit of Rs.50,000. As a result, you could claim a maximum deduction of Rs.50,000 from your health insurance premium, Central Government Health Scheme (CGHS), preventive health checkups, and medical expenses for yourself or senior citizen family members, plus an additional Rs.50,000 if such expenses are incurred for senior citizen parents.

Tax Exemptions for Senior Citizens Under Section 80D

Let’s look at the senior citizen tax exemption under Section 80 D.

a) Health insurance premiums for oneself, one’s spouse, and one’s children (Rs. 5000 preventive health checkup amount is included):

Rs. 25,000 for self, spouse, dependent children, and parents who are also non-senior citizens.

Self, spouse, and dependent children are not senior citizens, but parents are: Rs. 25,000

Rs.50,000 for the self, spouse, and both dependent children and parents who are senior people.

b) Parents’ health insurance costs and preventive health checkups:

Rs. 25,000 for self, spouse, dependent children, and parents who are also non-senior citizens.

Self, spouse, and dependent children are not senior citizens, but parents are Rs.50,000.

Rs. 50,000 for self, spouse, and both dependent children and parents who are senior people.

c) Healthcare expenses for oneself, dependent children, and the spouse: 

For self, spouse, dependent children, and parents who are also non-senior citizens: NA.

Self, spouse, and dependent children are not senior citizens, but parents are NA.

Senior citizens include self, spouse, both dependent children, and parents. Covered under the Rs. 50,000 maximum tax limit.

d) Medical bills for parents:

For self, spouse, dependent children, and parents who are also non-senior citizens: NA.

Self, spouse, and dependent children are not senior citizens, but parents are: The maximum tax limit of Rs. 50,000 is covered.

Senior citizens include the self, spouse, both dependent children, and parents. Covered under the Rs. 50,000 maximum tax limit.

e) Section 80D maximum tax deduction limit: 

Rs. 50,000 for self, spouse, dependent children, and parents who are also non-senior citizens.

Self, spouse, and dependent children are not senior citizens, but parents are: The maximum tax limit of Rs. 75,000 is covered.

Senior citizens include self, spouse, both dependent children, and parents. The maximum tax limit of Rs. 100000 is covered.

What Modes of Payments are Accepted Under Section 80D?

You can only claim medical expenses if you pay with something other than cash. As a result, if you paid your medical costs with a debit card, a credit card, online banking, UPI, or a wallet, you are entitled to file a claim.

Section 80DDB, in addition to Section 80D, covers certain diseases or medical conditions for a certain age range. You could file a claim under section 80DDB if your medical condition falls under that group. In the event that the limit has been reached or the medical condition does not fit into that category, you can recover the remaining medical expenses under section 80D.

You Might Not Want to Forget these Documents

The Income Tax Act does not define which documents must be provided in order to claim a tax deduction. Medical expense bills, medicine invoices, diagnostic test reports, medical history documents, doctor’s prescriptions, and other documentation should be kept.

Buying health insurance for your older parents should be your first concern because they deserve to live a healthy life in their golden years. Purchase health insurance coverage that covers your entire family’s needs right away!

Conclusion

Now that you know all of this – you are all set for that claim from your medical bills. Also, make sure that you do not forget the documents that you need.