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How Medical Bills Can Help Senior Citizens in Saving Taxes?

Published On Dec 25, 2020 5:30 AM By Gunjan Anand

Golden years of an individual’s life are most precious and should be spent in living a life free of financial burden, with proper access to health care facilities. However, most health insurance plans do not consider factors like finances of senior citizens, their medical conditions etc, and charge high premium rates. Also, a lot of insurance companies are unwilling to offer health insurance plans to old people with a pre-existing health disease.
Taking such conditions in consideration, the government announced amendments to sec 80D under Income tax act in the 2018 budget. It allowed the medical expenses of senior citizens as valid tax deductions.

Eligibility to Claim Tax Deduction

Deductions on tax can be claimed if the medical expenses are incurred on the family members or parents, who are more than 60 years in age. As per the law, a family member includes self, spouse and children. Tax deduction on medical expenses can be claimed by an individual who has sustained the expenses. Thus, if you are above 60 years in age and are not insured under any other existing health insurance plan, then the deduction can be claimed by you.
In case, if a person has incurred medical expenses for their parents, aged more than 60 years, then he can claim the deduction.

What is Covered Under Medical Expenses?

The types of medical expenses or diseases covered are not defined in the Income tax act. However, expenses incurred on medicines, consultation fees, other medical devices such as hearing aids, pacemakers, etc as per the opinion of experts shall be considered under the amendment introduced by the government.
Section 80D in addition to section 80DDB covers certain diseases or medical conditions for a specific age group. If your medical condition comes under that category, you can make a claim under section 80DDB. And if the medical condition does not fall under that category or in any case the limit has been exhausted, the remaining medical expenses can be claimed under section 80D. The maximum deduction that is permitted to be made in a financial year is Rs. 50,000.

Documents Required to Claim Tax Deduction

The list of documents required to claim tax deduction is not specified in the Income tax act. However, it would be smart to save documentary evidence like bills of medical expenses, medicine invoices, reports of diagnostic tests, documents regarding medical history, doctor’s prescription, etc.

Payment Mode

The payment of premium on health insurance plan or medical expenses needs to be done in any mode except cash, be it through net banking, debit card, cheque, etc or any other digital mediums like mobile wallets, UPI etc, to pay the premium. However, the payment of preventive check ups can be done in cash up to a limit of Rs. 5000. Preventive health check ups are basically done in order to protect oneself from the exposure to any disease.

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