How Can Senior Citizens Save Money On Taxes By Deducting Medical Bills Under Section 80D?
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The Income Tax Act allows you to claim a maximum deduction of Rs 50,000 (as of FY 2021-22) on medical expenses incurred on the healthcare of senior citizens (eligible parents) in a financial year. Hence, if you are aged 60 years and above, then you can claim a maximum tax deduction of up to Rs 50,000 on your medical expenses or health insurance premium.
Which Medical Expenses are Eligible for Tax Deduction Under Section 80D?
Any disease or medical expenses that are not defined in the Income Tax Act won’t be covered for tax deduction under section 80D. However, expenses incurred on doctor’s consultations, medicines, hospitalization and medical devices, such as pacemakers, hearing aids, etc., shall be considered for deductions as per the government amendments to the Act.
In addition to Section 80D, there are certain medical conditions and diseases that are covered under Section 80DDB. These diseases include AIDS, cancer, Parkinson’s disease, etc. While non-senior citizens can avail a deduction of up to Rs 40,000, senior citizens can claim tax deductions of up to Rs 1,00,000 under this section. So, if the medical condition for which you are paying the bills comes under this category, then you can file a claim under Section 80DDB.
If a medical condition does not fall under Section 80DDB or if the limit gets exhausted, then you can claim the remaining medical expenses u/s 80D.
How to Pay Health Insurance Premium to Avail Tax Deduction Under Section 80D?
To claim tax deductions, use online payment modes to pay the premium of your health insurance plan or the cost of medical treatment. Do not use cash as a mode of payment; rather use a debit card, credit card, net banking, cheque payment, etc. You can also use other digital payment methods, such as UPI, mobile wallets, etc., to pay your medical expenses or the premium amount.
However, you can pay for preventive health checkups in cash. Preventive health checkups should be done periodically to protect yourself from any exposure to an illness or disease. If a disease or medical condition is diagnosed timely, then the right treatment can be availed.
Conclusion
So, when you file your income tax return for the next financial year or submit your proof at the end of this financial year, don’t forget your medical bills. If you are a senior citizen or have elderly parents for whom you pay the premium or medical bills, then you can claim those expenses too.
Also read- Check These Things Before Renewing Your Health Insurance
