Income Tax Filing 2024: How much tax exemption do senior citizens get on medical insurance?
Income Tax Filing 2024: IRDAI has asked insurance companies to offer health insurance products for all age groups, including senior citizens, and provide coverage for all types of pre-existing medical conditions. The revised guidelines include a reduction in the waiting period, which has now been reduced from four years to a maximum of three years. Insurers currently offer comprehensive coverage that includes preventive health checkups, no-claim bonuses, and discounts on policy renewal. Additionally, the Income Tax Department offers various tax benefits on health insurance-related expenses for senior citizens or other family members.
Section 80D of the Income Tax Act
According to Section 80D, a taxpayer can claim a tax deduction on the premium paid for medical insurance for self, spouse, parents, and dependent children. Individuals and HUFs can claim this deduction. Medical expenses incurred by senior citizens are also included in this. Senior citizens can avail of tax benefits of up to Rs 50,000 on medical insurance payments under Section 80D of the Income Tax Act 1961. Individuals who cover health insurance premiums for their senior parents are eligible for a tax deduction of up to Rs 50000. Additionally, they can claim a discount of Rs 25,000 on their health insurance policies. Policyholders can avail of tax benefits on the insurance premium paid for themselves, their life partner, children, and parents. Especially if the senior citizen purchases health insurance coverage for both himself and his senior parents, the maximum allowable deduction is limited to Rs 1 lakh.
Preventive Health Checkup
The Income Tax Department offers a tax deduction of Rs 5000 for preventive health checkups. However, it has been adjusted within the limit of Rs 50,000 for senior citizens.
Multi-Year Policy Payment
Senior citizens have the option to prepay their insurance premium for a period of one, two, or three years, thereby availing the benefit of substantial discounts offered by insurers. This approach allows them to claim a proportionate tax deduction annually. For example, if a senior citizen pays a premium of Rs 80,000 for a policy with a two-year term, they can avail of a tax deduction of Rs 40,000 every year under Section 80D.
Section 80DDB
Senior citizens can avail of tax relief of up to Rs 1 lakh under Section 80DDB of the Income Tax Act for specific illnesses. For this deduction, proof like a doctor's certificate is required. After the pandemic, awareness about health insurance has increased. Coverage is available, including expensive treatment for diseases such as cancer and AIDS.
Important point
Tax benefits related to health insurance are limited to the provisions of the old tax system. However, it is important for individuals not to view health insurance solely through the lens of potential tax savings. While these incentives can be an important motivating factor, the primary objective of health insurance should be to provide financial protection for you and your family in case of a medical emergency.
Things to consider before buying health cover
Before purchasing health cover, senior citizens should inquire about the waiting periods and understand how they will affect coverage for pre-existing conditions.
While choosing a policy, it is important to consider the network coverage for senior citizens, limits on room rent, sub-limits for illnesses, coverage for consumables and other terms and conditions of the policy that may limit the payout when making a claim.
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