Save Tax with Senior Citizen Health Insurance under Section 80D

Posted on: Dec 13, 2021 | 3 mins | Written by: HDFC ERGO Team

Save Tax with Senior Citizen Health Insurance under Section 80D

How can senior citizens save tax - Health insurance

Are you all set to start a new phase of life as a senior citizen?Well, you have worked hard all these years and now you deserve rest, relaxation and happiness! However, do keep in mind that growing old also means becoming more vulnerable to many diseases. And while the medical infrastructure in the country is improving day by day, exorbitant healthcare bills can burn a hole in your pocket. Which is why, having senior citizen health insuranceis wise as it will protect you financially in case of an emergency. Another great thing about such a health plan is that it can help you save tax. In fact, if you are not a senior citizen yet but have parents who are senior citizens,even then you can save tax on medical expenses. Let’s delve deeper into how that works.

Tax deductions under Section 80D

Under Section 80D of the Income Tax Act, the insurance premium that needs to be paid for buying any health insurance policy is deductible from the income of the policyholder. This tax deduction benefit can be availed not only by the policyholder for their personal medical treatment, but also for their spouse and other family members. You can claim a maximum deduction of INR 25,000 per year if you buy a health insurance plan for yourself, your wife, and your children. You can claim an additional deduction of INR 25,000 if you pay the insurance premium for your parents if they are below 60. If your parents are above 60 years of age, you can claim an additional deduction of upto INR 50,000.

Now, if the age of the insured as well as their parents is above 60, the maximum deduction one can avail under section 80D is up to INR 1 lakh. Apart from this, you can also claim a rebate of INR 5,000 for expenses related to health check-ups for the entire family.

Tax benefits for aged parents

As mentioned earlier, senior citizens can avail health insurance tax benefit of up to INR 50,000 on premium. Not only does section 80D offer senior citizen health insurance benefits, but also includes a provision for super senior citizens. People who are 80 and above and do not have their own health insurance policy can claim a deduction of upto INR 50,000 while availing medical treatments and health check-ups.

Tax deductions for senior citizen policyholders

In simple terms, policyholders aged 60 years and above are entitled to an annual tax benefit of up to INR 50,000 per annum when it comes to claiming medical bills and payments as per Section 80D of the Income Tax Act.

Split insurance premiums and tax deductions

Oftentimes, people ask if they can divide the deductible amount between the policyholder and their spouse under section 80D. Also, people sometimes wonder if the insurer would issue two different tax certificates if the premium for one health policy is divided into parts.

First, you need to know that the deduction provided under section 80D is available in respect of the taxpayer, spouse, and dependent parents. The terms of section 80D don't impose any bar or disallow the splitting of premium payment between the taxpayer and their spouse for a single policy.

This largely helps families where both spouses are earning. Both husband and wife can together pay the premium amount, reducing the burden of paying the premium single-handedly. Also, if the wife of the taxpayer wishes to buy health insurance policies separately, she can demand extra tax deductions under section 80D.

Conclusion

As you age, your immunity weakens, and you become vulnerable to many ailments. And some of the ailments might require hospitalisation or frequent medical attention too. In such cases, a senior citizen health insurancepolicy comes in handy and helps you deal with emergencies. And as we discussed above, health insurance not only safeguards your medical needs, but also saves tax under Section 80D of the Income Tax Act. So, make the most of your policy today!

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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