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How to Maximise Income Tax Deductions in Senior Citizen Health Insurance Plans?
by Shashank Bhaskar Finance AdviserThe two vital things that everyone needs in life are money and good health. This holds all the more important in the life of a senior citizen. As you grow older, your immunity and energy levels decrease. With age, health issues also increase and so do your expenses on healthcare. For that reason, senior citizen health insurance is important for everyone coming into that age bracket.
To augment the purchase of senior citizen health insurance, there are numerous benefits that the government has granted. One example of the same is the tax rebate they can avail.
Tax Deductions As Per Section 80D
As per Section 80D of the Income Tax Act, one can avail of deductions on premiums paid for health insurance. These deductions can be availed on insurance purchased for self, spouse, dependent children and parents. It is, however, important to understand that in order to avail of these deductions, the premium for the medical insurance policy must be paid through digital means like UPI, net banking or cheque and demand draft. Cash payments made towards health insurance premiums are not eligible for tax rebates. The same rule applies in the case of medical insurance for senior citizens too. For expenses paid on healthcare or health checkups, one can avail rebate on cash payments as well.
Section 80D for Senior Citizens
As per Section 80D, any premium paid on the purchase of a health insurance plan is deductible from the taxable income. While the maximum deduction allowed for the same is Rs 25000 for a year, an additional deduction can be made, up to a total of Rs 50000 for parents above the age of 60 years.
In case the policyholder, as well as their parents, are senior citizens, then the maximum deduction can go up to Rs 1 lakh. They can avail of an additional deduction of Rs 5000 for health checkups for themselves and their family members.
Tax Deductions for Medical Expenses
Diseases or healthcare expenses which are not mentioned as per the Income Tax Act are not covered for tax deductions. Money spent on pacemakers, doctor’s consultations, hospitalization, medicines, hearing devices etc. are allowed for tax deductions as per the Income Tax Act. This is defined under Section 80DDB of the Income Tax Act.
Tax Deductions for Split Insurance Premium
Many times, people want to divide the deductible amount between themselves and their spouses for premiums paid on medical insurance for senior citizens. It is important to know that the deductions provided as per Income Tax Act allow the splitting of premiums for senior citizen health insurance. This comes in handy when both spouses are earning and can pay for the premium together. If both spouses are willing to purchase individual medical insurance for senior citizens, they can avail of additional tax benefits.
Medical insurance for senior citizens is necessary not only to secure their health but also to reduce the burden of income tax. It is vital to understand the needs of your family and decide on whom to include in your insurance policy so you can enjoy maximum benefits.
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About Shashank Bhaskar 
Finance Adviser
14 connections, 1 recommendations, 82 honor points.Joined APSense since, August 9th, 2018, From Mumbai, India.
Created on Mar 23rd 2023 11:46. Viewed 165 times.
