How Senior Citizens can save Tax with Medical Bills u/s 80 D?

Any medical expense that a person incurs on himself or his family member, including senior citizens, is eligible to avail tax benefit under Section 80D. The medical bills paid by an individual for his/her parents or by a senior citizen himself are also eligible for tax benefit u/s 80D. Senior citizen refers to a person who is 60 years old and above.

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    What is the limit to Claim Medical Bills?

    The Income Tax Act allows a taxpayer to claim a maximum deduction of Rs 50,000 on medical expenses incurred on senior citizens (parents). Hence, anyone who is older than 60 years can claim a maximum up to Rs 50,000 on their medical expenses. Moreover, if you are paying an additional premium for your parents who are above the age of 60 years then you can claim an additional deduction of up to Rs 50,000. It is the overall limit under Section 80 D.

    So, you can claim an amount equal to Rs 50,000 from your preventive health check-ups, health insurance policy premium, medical expenditure for you and your family members, and the Central Government Health Scheme (CGHS). This limit is for senior citizens and additional Rs 50,000 if you are paying it for your senior citizen parents.

    Here is the table with tax deduction limits under section 80D in different scenarios:

    Particulars

    Maximum Limit

     

    Self, spouse and dependent children are NSC* &

    Parents are NSC

    Self, spouse and dependent children are NSC

    & Parents are SC**

    Self, spouse and dependent children are SC

    & Parents are SC

    1. Health insurance premium of self, spouse & children (including preventive health check-up up to Rs 5,000)

    Rs 25000

    Rs 25000

    Rs 50000

    2.Medical insurance premium and preventive health check-up for parents

    Rs 25,000

    Rs 50,000

    Rs 50,000

    3.Medical bills of self, dependent children & spouse

    N/A

    N/A

    Covered within the limit of Rs.50,000 in (1)

    4.Medical bills for parents

    N/A

    Covered within the limit of Rs 50,000 in (2)

    Covered within the limit of Rs 50,000 in (2)

    Deduction Limit u/s 80D

    Rs 50,000

    Rs 75000

    Rs 1 lakh

              (Source: Clear Tax)

    *NSC stands for Non-senior citizen

    **SC stands for Senior citizen

    What is covered under Medical Expenses?

    Any disease or medical expenses that are not defined in the Income Tax Act won’t be covered. However, expenses incurred on Doctor’s consultation, medicines, other medical devices such as pacemakers, hearing aids, etc. shall be considered as an opinion given by the experts and as per the government amendments.

    In addition to Section 80D, there are certain medical conditions and diseases that are covered under the Section 80DDB for a specific age group. So, the medical condition for which you are paying the bills comes under this category then you can file a claim under Section 80DDB.

    Any medical condition that does not fall under this category or if the limit gets exhausted, then the claim for remaining medical expenses can be filed u/s 80D.  You can file the claim for a maximum of Rs 50,000 during a financial year.

    How to Pay the Premium?

    Use online payment modes to pay the premium of your health insurance plan or the cost of medical treatment. Do not use cash as a mode of payment; rather use a debit card, net banking, cheque payments, etc. You can also use other digital payment methods such as UPI, mobile wallets, etc. to pay the premium amount.

    However, you can pay the premium for preventive health checkups in cash and the maximum limit for this is Rs. 5000. Preventive health checkups should be done periodically to protect yourself from any exposure to an illness or disease. And if it is diagnosed timely, then the right treatment can be availed.

    Documents Required to Claim Tax Benefits

    The Income Tax Act does not specify any list of documents that are required to claim tax benefits under the Section 80D. 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.

    Bottom-line

    So, when you file your Income Tax Return for the next financial year or submit your proof at the end of this year then you can use your medical bills too. If you are above the age of 60 years or have elderly parents for who you pay the premium or medical bills then you can file the claim as well.  For more details, you can write to us at care[at]policybazaar[dot]com

    Written By: PolicyBazaar - Updated: 29 June 2021

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