Earlier, 65 years used to be the qualifying age for a senior citizen in India. However, since the year 2011-12, according to the Indian Constitution, an individual above the age of 60 years is considered to be a senior citizen.
When one becomes a senior citizen, along with a sigh of relief to be free from most responsibilities also comes a feeling of uncertainty about the future. Keeping this in mind, the Government of India, along with other pension schemes also provides a number of tax benefits to the senior citizens, including health insurance tax benefits. This is done especially to reduce the financial burden of the senior citizens.
Here is a list of some income tax deductions on medical insurance for senior citizens.
Additional tax deductions on senior citizens health insurance
While earlier the tax benefit on senior citizen health insurance was INR 20,000 from the year 2016-17, this amount has increased up to INR 30,000 as per Section 80D medical insurance benefits of the Income Tax Act, 1961.
Deductions in tax for very senior citizens
Senior citizens are divided into two categories, namely, ‘senior citizens’, who are above the age of 60 years and ‘very senior citizens’, who are above the age of 80 years. From the year 2016-17 onwards, all healthcare expenses incurred towards a senior citizen come with health insurance tax benefits. In case no expenses have been incurred and the premium paid is below INR 30,000, then the tax on medical insurance for senior citizens shall be considered as per Section 80D medical insurance.
A larger deduction in tax as per Section 80DDB
Under Section 80DDB of the Income Tax Act, 1961, you are provided tax benefits for the treatment of specific diseases. Usually, this amount is not more than INR 40,000 for an individual below 60 years of age. However, in the case of a senior citizen, a higher deduction of INR 60,000 is provided as part of health insurance tax benefit for senior citizens. Therefore, senior citizens above the age of 80 years enjoy a tax exemption of around INR 80,000 as per Section 80DDB of the Income Tax Act, 1961.
As we grow older, the chances of suffering from ailments also increase. And this is why one needs medical insurance, especially after becoming a senior citizen. A medical insurance at this phase in life provides the required financial support in case of a medical emergency. However, owing to its high cost, a number of senior citizens refrain from availing of a medical insurance. The tax benefits on senior citizen health insurance mentioned above make the medical insurance more feasible for both senior as well as very senior citizens.
So, if you are a senior citizen or have a parent who is one, make investing in a senior citizen health insurance your top priority.