Tax Benefits On Health Insurance For Senior Citizens
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With the rise in the inflation due to the spread of the global pandemic, the cost of treatments in the hospitals have also gone higher than usual. These costs of treatments can potentially burn a hole in the pockets of the individuals thus leading to the exhaustion of their financial savings on the medical treatments. People have to pay out of their pockets when receiving treatments at the private hospitals which lead them into the financial constraints spiral where they end up being in a debt trap. Health insurance plans support the policyholders in such conditions, as it offers them the much needed financial support at an affordable premium rate.
The premium rate of these plans increases with the increase in the age of the policyholder. That is, the senior citizens have to pay the highest premium as they are at a higher risk of contracting a disease, even though they do not have a permanent source of income. To help the senior citizens from such conditions, the Government of India in its 2018 budget made a proposition of tax deduction on the medical dues of the policyholders above the age of 60 years under the Income Tax Act’s Section 80D. This was an extension to enhance the already existing income tax law for health insurance insurance.
Tax Benefits On Health Insurance For Senior Citizens
Senior citizens are at a larger risk of contracting life-threatening diseases and therefore their premium amounts are kept higher than usual. Also, they do not offer coverage for their pre-existing diseases, which makes it difficult for them to get an extensive coverage experience. To help them undergo old age and live their golden period without any worries, tax deductions are offered on their medical bills. People with age 60 years and above are eligible for tax deduction benefits on their medical expenses provided that they are not insured under any other health insurance policy. If due to financial or any other reasons, the parents are unable to pay their premiums, then their children who are the policyholders and taxpayers can avail of the tax reduction benefits on behalf of their parents.
Must Read: All You Need To Know About Tax Benefits Under Health Insurance Plans
Coverage of Medical Expenses That Are Eligible For A Tax Deduction
According to the recent amendments that were made in the Income Tax Act, expenses of hearing aids, consultation fees, medicines, medical bills, medical devices like pacemakers, etc are not included for tax deduction perks. Section 80DDB has a list of some medical ailments, if your ailment is not a part of this section then you can claim the benefit under section 80D of Income Tax Act. The maximum limit on deduction for a financial year is limited to Rs. 50,000. Medical expenses paid in cash are not considered for tax saving perks by the insurers. Therefore, you must make your payments using a cheque, debit card, net banking, etc. An amount of Rs. 5000 can be made in cash for preventive health check-ups of the policyholders.
Documents Required To Make A Tax Deduction For Senior Citizens
To avail the tax deduction perks under your health insurance policy for the senior citizens, no specific list of documents have been specified under the act. However, certain essential documents like the report of diagnosis tests, other medical reports, bills, invoices, prescriptions, documents of medical history, etc must be saved for availing the benefit. These documents serve as a valid proof of hospitalization of the policyholders.
Conclusion
Tax deduction perks should not be the sole reason to invest in a health insurance plan as it is a decision that affects in the long term. You must avail the tax saving perks under your purchased health insurance plan and to gain a better understanding of the terms under the tax deduction, you must go through the terms and conditions of your purchased policy.
Also Read: Tax Benefits In Health Insurance
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.
