A personal health insurance policy is critical at a time healthcare inflation in India is hovering around 14 percent. However, many senior citizens are unable to obtain one at affordable premiums due to advanced age and pre-existing diseases.
The hospitalisation, diagnostic and doctor consultation expenses that they incur, therefore, have to be paid for from their savings. Taking cognisance of such recurring, unavoidable expenses, the income tax rules offer some relaxation to taxpayers over the age of 60 years.
That is, such senior citizens can avail of the tax deduction under Section 80D of the Income-tax Act, which deals with health insurance premiums, even if they do not actually have a health insurance policy. Ensure that you claim these tax benefits at the time of filing income tax returns before the extended September 15 due date, provided you are choosing the old regime.
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What is Section 80D?
First, it’s important to understand all the tax breaks that Section 80D, one of the most popular tax-saver avenues, offers.
A taxpayer can claim deduction for health insurance premiums paid and expenses incurred on preventive health check-ups for self and family (spouse and dependent children) for an aggregate amount of up to Rs 25,000 per financial year.
In addition, a taxpayer can claim another Rs 25,000 deduction for health insurance premium paid and expenses incurred on preventive health check-up for parents.
If the person—self or a member of the family—for whom the premium is paid is also a senior citizen, the deduction limit goes up to Rs 50,000. So, if you are a senior citizen yourself and also pay the premiums for your parents, you can claim a total deduction of up to Rs 1 lakh.
While payment for preventive health check-ups (capped at Rs 5,000) can be made in any mode, including cash, other payments must be made in non-cash mode to claim Section 80D deductions.
Also read: How to optimise Section 80D deductions at the time of filing tax returns
Relief for those without health covers
What about senior citizens who do not have health insurance covers? For such taxpayers, the section allows a concession. You can claim deductions of up to Rs 50,000 a year on medical expenses incurred. If your children have funded these expenses, they will also be eligible for the tax break. To be sure, these benefits are offered only to those over the age of 60. This rule ensures that senior citizens and their children who incur recurring medical expenses are not left out of the tax benefit ambit. However, these benefits are not available under the new, simplified tax regime.
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