How can Senior Citizens save money on taxes by using Section 80D to deduct medical bills?
Published On Apr 09, 2022
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Every day, an individual's average health-care spending rises. Out-of-pocket expenses, or medical expenses paid out of one's own pocket, are among the highest in our country. If you are admitted to a private hospital for treatment of a medical issue, it is inevitable that you will spend all of your funds by the time the treatment is completed. Health insurance policies are available on the market to help people in such situations. However, as an individual's age rises, so does the amount of premium he or she must pay. As a result, an elderly person must pay a higher premium on his or her health insurance policy than an adult. This increase in premium rates makes it more difficult for the elderly to live a peaceful life as their financial burden grows, especially if they do not have a steady source of income. To prepare for such circumstances and to promote elderly persons' healthcare and treatments, the Indian government proposed a tax deduction on medical bills for people over the age of 60 under section 80D of the Income Tax Act in its 2018 budget. This was an addition to the current tax deduction benefits for senior folks to help them financially.
The Legal Obligation To Take A Tax Deduction
Many health insurance companies refuse to sell coverage to older persons with pre-existing ailments, and their rates are kept higher because they are more likely to get a disease at that age. Tax deductions for medical expenditures for family members, including you, your spouse, children, and dependent parents aged 60 and up, can be claimed to help them survive this age and live their golden years. As a result, senior citizens aged 60 and up are eligible for tax savings on their medical expenses as long as their parents are not covered by another health insurance policy. If the parents are unable to pay the premiums, their child, who is a taxpayer, may be eligible for tax benefits on behalf of his or her parents under section 80D of the Income Tax Act.
Coverage of Medical Expenses That Are Tax Deductible
Hearing aids, consultation fees, prescriptions, medical bills, and medical devices such as pacemakers will all be covered by the tax deduction benefit, thanks to recent modifications to the Income Tax Act. The statute makes no mention of any other specific illnesses. Section 80DDB lists a number of medical conditions; if your condition isn't listed there, you can claim the benefit under section 80D. A maximum deduction of Rs. 50,000 can be claimed in a single financial year. In addition, the insurer will not consider medical expenses paid in cash. Payment for medical expenses must have been made by check, debit card, net banking, or other means. A cash payment of Rs. 5000 can be made for preventative health check-ups, which are exams that look into the possibility of contracting an illness.
Documents Necessary For A Tax Deduction
There is no precise list of documents that have been provided under the Act to qualify for a tax deduction for older persons' medical expenditures. However, some documents must be kept in order to receive the benefit, such as diagnosis test reports, other medical reports, bills, invoices, prescriptions, medical history documents, and so on. It's possible that the insurer will demand legitimate proof of medical expenses incurred during the treatment of a senior citizen's illness.
One of the most commonly praised benefits of having health insurance coverage is the tax deduction, but it should not be the only reason to purchase one. Some people purchase health insurance to avoid paying taxes, but they neglect to purchase coverage that is appropriate for them, which becomes an issue when it comes time to file a claim.
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