*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
*Tax benefit is subject to changes in tax laws. Standard T&C Apply
Wednesday, February 7, 2018 – On February 1, 2018, Union Finance Minister Arun Jaitley presented his third Budget. In this union budget, the government of India decided to lift the maximum tax deduction limit of health insurance premium for senior citizens under Section 80D of the Indian Income Tax Act 1961. Earlier, the limit of tax deduction allowed on health insurance for senior citizens was Rs. 30,000 which has now been increased to Rs 50,000.
Subject to the provision of this section, for each relevant previous year, a deduction will be allowed that will be equivalent to a fraction of the lump sum amount paid (for more than an year) as insurance premium payout to keep the health insurance in force.
Yashish Dahiya, the Co-founder and CEO of Policybazaar.com explains that the raise in the limit of tax deduction for health insurance premiums for senior citizens will ensure better penetration for health insurance companies in the county.
He was quoted as saying, “The increased tax deduction limit will encourage senior citizens or families to buy adequate health cover for elderly parents. The medical inflation in India is increasing at a significant rate almost 12-15 per cent every year. Therefore, it is critical to have an adequate health cover for senior citizens.”
Mr. Dahiya also welcomed the government sponsored ‘National Health Protection Scheme’ for 10 crore families.
As per the provisions under Section 80D of the Indian Income Tax Act 1961, the total deduction allowed on expenses incurred on medical treatment of specified diseases for individuals and Hindu undivided families in case of senior citizens is Rs. 60000 and in case of very senior citizens is Rs. 80000. These deductions are subjected to various other conditions.
It has been proposed to amend the provisions of section 80DDB of the Income-tax Act to raise the present tax deduction limit available to an individual and Hindu undivided families in relation to the medical treatment expenses incurred on specified diseases for senior citizens to be Rs. 1 lakh. This amendment is likely to come into force from 1st April, 2019 and will be applicable for assessment year 2019-2020 and subsequent years.
The biggest advantage for the Indian healthcare sector is the increased scope of health insurance coverage for underprivileged families. The government has decided to offer health insurance coverage of up to Rs.5 lakh per family per year of hospitalization for secondary and tertiary medical care.
The union Budget has in store a bouquet of benefits for the elderly people who comprise nearly 9% of Indian population. The recent amendments will offer dual benefits to the retired people, including health cover and tax savings at the same time.