How Senior Citizens Can Save Taxes With Medical Bills Under Section 80D?
Updated On Jul 23, 2021
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The average expenditure of an individual in the health care sector is increasing day by day. The out-of-pocket expenses, that is the medical expenses which are paid for from the pocket of the individual are among the highest in our country. If you are hospitalized for the treatment of a medical condition in a private hospital then it is obvious that you will end up draining your financial savings by the end of the treatment. To support people in such conditions, health insurance policies are available in the market. But, with the increase in age, the amount of premium also increases for the individual. Therefore, an old person has to pay more amount of the premium on his health insurance policy than an adult. This increase in premium rate makes it difficult for the old people to lead a life with peace as the financial load on them increases especially when there is no permanent source of income.
To survive such scenarios and to support the senior citizens’ healthcare and treatments, the Government of India in its 2018 budget made a proposition of tax deduction on the medical bills of the people above the age of 60 years under section 80D of the Income Tax Act. This was an extension to the existing tax deduction benefits to provide financial support to senior citizens.
The Requirement To Claim The Tax Deduction
Many health insurance providers do not give health insurance policies to senior citizens suffering from pre-existing diseases and also, their cost of premiums is kept higher due to their vulnerability to contract a disease at that age. To help them survive this age and live their golden period, tax deductions can be claimed on the medical bills of the family members which includes you, your spouse, children, and dependent parent of age 60 years and above. Thus, senior citizens of age 60 years and above are eligible for tax deduction benefits on their medical expenditures provided that the parents are not a part of any other existing health insurance policy. If in certain cases, the parents are not paying for the premiums, then their child who is a taxpayer can avail of the tax reduction benefits on behalf of his/her parents under section 80D of the Income Tax Act.
Coverage of The Medical Expenses Eligible For A Tax Deduction
Based on the recent amendments made in the Income Tax Act, expenses of hearing aids, consultation fees, medicines, medical bills, medical devices like pacemakers, etc will be covered for the tax deduction benefit. Any other specific ailments have not been mentioned under the act. Section 80DDB has a list of some medical diseases, if your ailment is not covered under this section then you can claim the benefit under section 80D. The maximum deduction that can be availed in a financial year is limited to Rs. 50,000. Also, medical expenses paid for in cash will not be considered by the insurer. The payment for the medical expenditures must have been made via a cheque, debit card, net banking, etc. An amount of Rs. 5000 can be made in cash for preventive health check-ups, which is a check-up meant for looking into the possible exposure to a certain disease.
Documents Required To Make A Tax Deduction
There is no specific list of documents that have been issued under the Act, to avail tax deduction under medical bills of the senior citizens. However, certain documents must be saved for availing the benefit like the report of diagnosis tests, other medical reports, bills, invoices, prescriptions, documents of medical history, etc. There is a possibility that the insurer might ask for a valid proof of the medical expenditures made during the treatment of an ailment of the senior citizen.
Tax deduction benefit is one of the widely admired benefits of having a health insurance policy, but it should not be the sole reason to invest in a health insurance policy. Some people buy a health insurance cover to escape the taxes and amidst that, they forget to buy a policy that is suitable for them, which at the time of claim proves to be a problem. Therefore, you must compare and purchase a policy that is highly beneficial for you and can potentially bear the fruits at the time of an emergency.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.