Health Insurance 444 views March 15, 2021

Senior citizens are prone to diseases and illnesses more than their younger counterparts. Their treatment can be expensive and may exhaust savings in no time. But a health insurance plan will cover such medical treatments seamlessly and keep the savings intact. It can also provide tax benefits to senior citizens besides protecting their finances if any medical emergency happens. Tax benefits for senior citizens further encourage the adoption of health insurance.

Health Insurance

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In this article, we will be discussing how senior citizens can avail tax benefits in Health insurance. Keep reading to know more!

Health Insurance Tax Benefits for Senior Citizens

The government of India provides tax benefits on the premium paid towards the policy along with the preventive health check-up per year to increase the adoption of health insurance. Considering the health risk that senior citizens face, tax benefits are higher for them as compared to individuals below 60 years of age.

Under Section 80D of the Income Tax Act, you are eligible for tax benefits on the premium payment. The tax deduction is available on health insurance for self, spouse and children. Remember that tax benefits are available on premium payments by modes other than cash. To know more about how senior citizens can avail tax benefits in health insurance, you can check the below table.

SituationsTax Deduction for Self, spouse and dependent children (In INR)Tax Deduction for Parents (In INR)Total Deductions (In INR)
If both the eldest member in your family (self, spouse and dependent children) and parents are above 60 years of ageUp to 50,000Up to 50,000Up to 1 lakh
If parents are above 60 years of age but the eldest member in your family (self, spouse and dependent member) is below 60 years of ageUp to 25,000Up to INR 50,000Up to 75,000

From the above table, you can see that senior citizens can avail of tax deductions up to INR 1 lakh if both the policyholder and parents are above 60 years of age. Let’s understand this through an example.

Suppose an individual with the age of 61 years chooses a health insurance policy for himself and his father who is 80 years. The premium paid towards the policies is INR 35,000 and INR 42,000 respectively. According to these details, he can get tax benefits up to INR 77,000 (42,000 + 35,000) for the premium paid towards the policy.

On the other hand, if the individual is below 60 years and his father is a senior citizen, he can claim a tax deduction of INR 60,000 (25,000 + 35,000) in a financial year for the policies with a premium amount of INR 30,000 and INR 35,000, respectively.

Tax Benefits in Health Insurance towards Preventive Health-checkup

Other than the premium paid towards the policy, senior citizens can also enjoy tax benefits up to INR 5,000 per policy year towards preventive health-checkup. However, this deduction will not be over and above the individual limits defined on the deductions on the premium paid. So, this deduction of up to INR 5,000 will be within the limit up to INR 1 lakh.

Suppose an individual with an age of 62 years chooses a health insurance policy with an annual premium of INR 18,000. He also goes through a preventive health check-up that costs INR 3,000. So, he can enjoy INR 21,000 (18,000 + 3,000) as tax deductions under Section 80D.

With regular preventive health-checkups, you can identify potential health emergencies before they become a financial emergency for you. That’s why these check-ups also qualify for tax benefits.

Single-Premium Health Insurance Tax Benefits for Senior Citizens

Health insurance policies can also be taken for more than one year. With such plans, individuals can choose to pay a single premium for a policy term of more than one year. Most people think that the premium payment towards such policies does not qualify for a tax deduction. It’s not true! Senior citizens can enjoy the tax benefits in single-premium health insurance equal to the appropriate fraction of the amount under Section 80D. This amount will be calculated by dividing the single premium amount paid towards the policy by the number of policy years. Do remember this deduction will be within the individual tax deduction limit.

Suppose a 65-year person chooses a 2-year health insurance plan with a single premium of INR 40,000. So, he can enjoy a tax benefit of INR 20,000 per year (40,000/2) on the premium paid towards his policy.

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