Health insurance is one of the most significant investments for senior citizens. As we age, our bodies undergo various changes that can make us more prone to health conditions. Therefore, in addition to following healthy lifestyle habits and taking good care of your health, you must opt for preventive healthcare and stay covered with adequate health insurance. With various medical insurance apps available, you can easily compare plans and purchase a suitable one in no time. If you are worried about rising medical bills or policy premiums, you can claim tax deductions of up to INR 50,000 every year while filing income tax returns. Read on to learn how senior citizens can save tax with medical bills under Section 80D of the Income Tax Act.
Tax Deductions on Medical Bills under Section 80D
Under Section 80D of the Income Tax Act, senior citizens can claim a tax deduction of up to INR 50,000 on their medical bills.
The following are some points to keep in mind:
- If you are over 60, you can claim this deduction annually while filing your income tax returns. This deduction is allowed on health insurance premiums or medical bills.
- If you are covered under health insurance, you cannot claim a deduction on your medical bills. Medical expenses typically include medical consultations, the cost of medicines and impairment aids, and more.
- If your son/daughter pays your medical bills or health insurance premiums, he/she can claim a tax deduction of up to INR 50,000 while filing his/her income tax returns.
The following table will help you understand the tax deductions available under Section 80D:
| Tax deduction under Section 80D | Maximum tax deduction | ||
| Individuals | Senior Citizens | ||
| A senior citizen pays health insurance premiums for self | NA | INR 50,000 | INR 50,000 |
| Health insurance premium paid by son/daughter for self (below 60) and parents (senior citizens) | INR 25,000 | INR 50,000 | INR 75,000 |
| Health insurance premium paid by son/daughter for self and parents (all are senior citizens) | INR 50,000 | INR 50,000 | INR 1 lakh |
Important tips for senior citizens
When buying health insurance, the following tips can help you choose the right coverage, ensuring both healthcare security and financial savings —
- Choose a comprehensive policy: Health issues and healthcare expenses tend to increase with age. Therefore, it is wise to choose comprehensive coverage to manage these costs and avoid financial setbacks. This is especially important for senior citizens who may have limited income or retirement funds. For example, a health plan that covers hospital bills, pre- and post-hospitalisation expenses, daycare procedures, home healthcare, AYUSH treatments, organ donor expenses, and preventive healthcare can significantly reduce your worries.
- Select coverage for critical illnesses: Older individuals are more prone to critical illnesses, such as heart disease, cancer, and kidney disease. These conditions often require long-term and expensive treatment. Therefore, it is wise to include critical illness coverage for better financial security. Insurance companies offer affordable premiums for critical illness covers, so purchasing this cover should not strain your finances.
- Select other crucial add-ons: In addition to critical illness coverage, senior citizens should consider important add-ons, such as room rent waivers, hospital daily cash, dental and vision care, and OPD expenses. These add-ons can reduce out-of-pocket expenses and ensure quality healthcare.
- Children can cover dependent parents: Covering dependent parents under health insurance ensures financial security in case of medical emergencies. Additionally, children can claim extra tax deductions on premiums paid for their parents’ coverage. Therefore, by taking health insurance for parents, you can secure both quality healthcare and financial peace of mind.
- Opt for preventive healthcare: Senior citizens can claim tax deductions of up to INR 5,000 on their preventive healthcare bills every year. However, this is included in the total deduction of INR 50,000 available under Section 80D. Therefore, if your health plan does not offer preventive healthcare, you can claim a tax rebate.
- Claim deductions for medical expenses: Senior citizens who are not covered under health insurance can claim a tax deduction of up to INR 50,000 every year on their medical expenses. If a child pays the medical bills on behalf of his/her parents, he/she can also claim this deduction when filing his/her tax returns.
Conclusion
By leveraging Section 80D for health insurance premiums and medical expenses, senior citizens can enjoy significant tax savings and reduce their overall financial liabilities. This deduction also encourages them to invest in a health plan without worrying about high premiums. Therefore, if you are a senior citizen, make sure you buy adequate health insurance online or through a medical insurance app to stay covered. If you are worried about high premiums, remember that claiming tax deductions on them can help lower your taxes and reduce your financial burden.
