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- What is Section 80D?
- The maximum limit for medical expenses claimed by senior citizens
- Coverage inclusions under medical expenditure
- To get the deduction under 80D
- Deduction allowed under section 80D
- Difference between 80D and 80C
- 80D provides tax benefits on medical expenditures for parents
- Eligibility for tax deduction under section 80D
- Senior citizens can claim medical expenditure deduction
- 80D deductions are not available for these people
- Documents required to claim medical expenses under 80D
- FAQS - FREQUENTLY ASKED QUESTIONS
As a person ages, health becomes the primary expense in most households. In such scenarios, individuals aged 60 and above can derive numerous advantages from medical insurance. If your senior citizen parents lack Health Insurance coverage or if you, as a senior citizen, find yourself without insurance, the government offers certain tax relief options.Also read: Know the Difference Between Mediclaim and Health Insurance
What is Section 80D?
Section 80D of the Income Tax Act permits a reduction in taxable income when an individual pays Health Insurance premiums for themselves and/or their family members. Furthermore, an amendment in this section allows tax deductions for medical expenses for senior citizens.Also read: Section 10 Of The Income Tax Act: All Exemptions Covered
The maximum limit for medical expenses claimed by senior citizens
Taxpayers who have not yet reached the age of 60 can claim expenses incurred for medical purposes. The maximum limit for these deductions stands at ₹ 50,000. This provision encompasses the costs associated with their medical needs and those of their spouses, dependent parents, and children. Senior citizens who have surpassed the age threshold are granted an even more generous deduction under section 80D. This deduction extends up to ₹ 1 lakh and acknowledges the heightened healthcare necessities often accompanying the advancing stages of life. The availability of such deductions is a commendable relief for the financial burden imposed by medical expenditures, thus fostering a sense of security.
Coverage inclusions under medical expenditure
Under ITR rules, taxpayers enjoy some tax benefits under medical expenditure. Under section 80D, if you have Health Insurance for a family such as a wife, spouse and children, there is a medical expenditure tax benefit provision.At the same time, it allows you to get tax benefits for preventive health check-ups and the family if policies cover them.Similarly, if a taxpayer has policies for senior citizens, then for them too, some medical expenditure tax benefits and preventive check-up tax benefits are provided.
To get the deduction under 80D
- To get the deduction under section 80D, taxpayers must purchase all the Health Insurance policies. If a third party purchases the policies, the tax benefits deduction won't apply.
- Health Insurance plan payments must be made through transfer, cheque, or a method for which proof can be provided. Tax benefits cannot be claimed if the premium is paid in cash.
- You can only obtain the deduction on the plan premiums, not on the service tax.
- To obtain the deduction, taxpayers should avoid taking group Health Insurance policies. Section 80D doesn’t include these policies. However, if the taxpayer has paid an upgraded premium, they can avail of a deduction on such premiums.
Deduction allowed under section 80D
| Expenses | Maximum Tax Deduction under 80D |
| Payment of Health Insurance premium for taxpayer spouse and children | ₹25,000 |
| Preventive health checkup expenses | ₹5,000 |
| Payment of Health Insurance premiums for senior citizens (parents) | ₹50,000 |
| Preventive health checkup expenses for senior citizens (parents) | ₹5,000 |
Difference between 80D and 80C
| 80C | 80D | |
| Objective | Provide tax exemptions on different types of investment plans such as ULIP, Provident fund national saving schemes and other tax saving investments. | Aims to provide tax exemption on different health care insurance premiums and tax deduction on preventive health check-up expenses |
| The upper limit of tax deduction | Up to 1.5 lakh with higher tax benefits | Up to 1 lakh with lower tax benefits |
Also read: Understanding Section 80C: How to Maximize Your Tax Savings
80D provides tax benefits on medical expenditures for parents
Medical expenses under 80D have not been elaborately or specifically defined within the Income Tax Act. However, doctor and hospital fees, treatment surcharges such as room rent, diagnostic tests, surgical costs, medicine bills, dentures and other dental implants, powered eyeglasses, and more can be claimed.Insurance premiums do not qualify when talking about senior citizen claims under 80D. However, investing in policies that offer health coverage comes in handy in critical situations. The government runs many insurance schemes for senior citizens. Read about these schemes here.Many private companies offer lucrative policies for the elderly, but there are many factors to consider when buying Health Insurance. Read through why health coverage is a must for seniors to know more.Also read: Most Common Tax Mistakes & How to Avoid Them
Eligibility for tax deduction under section 80D
For expenses grouped under 80D medical expenditure, deductions can be claimed by senior citizens and their children/spouses.
Senior citizens can claim medical expenditure deduction
Taxpayers over 60 can claim deductions for 80D medical expenditures as listed above. If the taxpayer is a senior citizen, they can claim tax deductions for medical expenses incurred by themselves and their spouses over 60. However, Rs. 1 lakh is the upper limit for the claim.
80D deductions are not available for these people
It is crucial to note that a senior citizen whose name is claimed for the 80D deduction must not be covered by any Health Insurance policy. However, obtaining a Health Insurance policy for senior citizens can offer additional benefits. Read more about those here. You can also look at this guide to buy insurance policies for senior citizens.
Documents required to claim medical expenses under 80D
No document prerequisites are necessary to file deductions for medical expenses under 80D. However, preserving hospital bills, medicine invoices, doctor's prescriptions, etc., can come in handy while supporting claims, even though there are no specifications in the act itself.The skyrocketing healthcare prices can overwhelm people from all parts of the country. Still, tax exemption options, like claiming deductions for medical expenses under 80D, are small steps to take to regular spending.
FAQS - FREQUENTLY ASKED QUESTIONS
How much 80D can senior citizens claim ?
Health care can be a major concern for senior citizens. Individuals above 60 who take health care insurance policies are entitled to deductions under section 80D of income tax on premiums and expenses incurred on medical tests. This exemption is under Section 80 of the Income Tax. According to section 80D of The Act, you can be exempted from health check-up expenses and medical expenditures for senior citizens who are above 60 years of age. An exemption of Rs 5000 for health-related check-ups and a rebate of up to Rs 50,000 is on the Health Insurance premium.
Can a senior citizen claim both 80D and 80DDB ?
You can get income tax exemption under sections 80D and 80 DDB of income tax. Still, it is necessary to keep all kinds of documents and evidence regarding the medical expenditure under 80D and section 80DDB. Please note that you can get a rebate under section 80 DDB whether the senior citizen is covered under any Health Insurance policy. It is also worth keeping in mind that to get this type of income tax exemption under 80DDB, the prescription given by your doctor should be present as proof, along with all related documents. If any insurance cover has been utilised, the entire expense paid by the insurance company will be in addition to the income tax exemption. It will be provided on the expense paid other than the amount paid by the insurance company.
Can we claim 80D for the mother-in-law ?
Under Section 80D of the Income Tax Act, the guardian is the parent; thus, you cannot claim income tax exemption under Section 80D on the medical health expenses of your spouse's parents. But if your husband or wife has an insurance policy on their mother or father's behalf, they can get an exemption under section 80D instead of paying the premium. Under certain circumstances, when your spouse's parent is disabled, you can claim tax benefits of up to Rs 75,000 in a financial year.
Can we avail of tax exemption for medical treatment received outside India ?
Yes, Section 80D provides tax exemptions if you have received medical treatment outside India under an overseas Health Insurance policy. However, you must remember that the Health Insurance policy you purchased must be from an insurance company registered with the IRDAI (Insurance Regulatory and Development Authority of India). Health Insurance policies provide tax benefits and several other financial and practical advantages. Hence, it is necessary to choose the best Health Insurance plan.
What is the difference between ITR section 80C and 80D ?
Under section 80D of the Income Tax Act, exemptions are available on Health Insurance premiums, paid for self, family, and parents, while under section 80C of Income Tax exemptions have been given on different types of tax-saving investments like Life Insurance Premium, Public Provident Funds, Employees Provident Fund, Equity Linked Savings Schemes (ELSS), Unit Linked Insurance Plan (ULIP), Home Loan Principal Repayment, NPS, Tax Saver Fixed Deposits, etc. Tax benefits are lower under Section 80D than those provided under Section 80C, which is higher. But an assessee can claim tax deductions under both these sections - 80D and 80C of the Income Tax Act.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
