Section 80D for Senior Citizens

In 2023-2024, it is estimated that over 80 million (8 crores) Indians filed their ITR, but only 28 million (2.8 crores) actually paid taxes. This can be attributed to how our tax structure is built — the Indian Tax Code provides numerous provisions for citizens to save on taxes every year even if their income isn’t part of the taxable income slabs. 

One of the most well-known provisions in the Indian Tax Code is Section 80C, largely thanks to the Life Insurance Corporation (LIC) popularizing life insurance policies over the decades. While many taxpayers recognize Section 80C (deduction of up to ₹1.5 lakh), there are also other valuable sections—such as Section 80G (for donations) and Section 80E (for interest on education loans). All these deductions are part of Section 80 of the Income Tax Act of 1961, which governs various taxpayer deductions, thereby reducing your taxable income.

In this article, let’s focus on another important subsection – Section 80D – which allows deductions on health insurance premiums and medical expenses. While this section can be useful for anyone, it’s especially relevant if your parents are senior citizens. 

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What is Section 80D for Senior Citizens?

Section 80D of the Income Tax Act allows taxpayers to have deductions on premiums paid for health insurance policies. You can deduct health insurance premiums, preventive check-ups, and some hospitalization expenses (if you opt for the old tax regime). 

This is particularly beneficial for senior citizens aged 60 years and above as it offers higher deduction limits. This is because the government recognizes that the older you are, the more you are prone to an ailment.

But do note that you can’t reduce the entire premium amount. The amount you can deduct varies based on various clauses, which we will look at now.

Tax Deductions Under Section 80D for Senior Citizens

The deductions available under Section 80D vary based on your age and the person for whom you have purchased the policy:

If you are below 60, the maximum deduction under Section 80D is ₹25,000 for yourself (including spouse and dependent children). You can claim an additional ₹25k if your parents are below 60. If at least one of your parents is over 60, it increases to ₹50k.

If you and your parents are older than 60, you can claim ₹ 50k for each – i.e., a total deduction of ₹ 1 lakh.

There’s also an up to ₹ 5 thousand deduction for preventive health check-ups. But this is not in addition to the above limit.

Let’s understand this with a few common cases –

Different Cases

• Two policies - Family floater for self (<60) and family floater for parents (< 60)
  • When opting for a family floater covering yourself and your parents, both under the age of 60, you can claim a deduction of ₹ 25 thousand for yourself, your spouse, and dependent children, and an additional ₹ 25 thousand deduction for premiums paid for your parents.
• One policy - Family floater for self (<60) + parents
  • In the case of a family floater where you have included a parent aged above 60, the insurer will provide a breakdown of premiums for each insured individual. If your parents are below 60, you'll receive a ₹ 25 thousand deduction for their premiums, but if they're above 60, you can claim a ₹ 50 thousand deduction for them. 
  • However, if you don’t get the premium split from your insurer and try to claim the deduction, you can claim only a ₹ 25k deduction under the ‘self’ heading.
  • Optima Secure, for example, provides the premiums separately for parents and self (including spouse and children) by default. In case your insurer does not, feel free to request them for the same.
• One policy - Floater for parents alone
  • If you opt for a floater policy exclusively for your parents, and at least one of them is over 60 years old, you can claim a deduction of ₹ 50k for the premiums paid. If both parents are below 60, the deduction is ₹ 25k.
• If you take separate policies for your parents (one above 60 and one below 60)
  • Opting for separate policies for your parents allows you to claim a total deduction of ₹ 50k for the premiums paid for their health insurance if at least one of them is > 60 years old.
• If you and your parents are > 60 years old
  • If you and your parents are over 60 years old, you can claim a deduction of up to ₹ 50k for yourself and ₹ 50k for your parents.

Best Policies for Senior Citizens in India

Do note that not all policies get approved, and the final approval depends on the insurer’s underwriting team, which assesses factors such as medical history, age, and overall risk profile before issuing the policy. However, even if the insurer rejects your policy, there are ways to benefit from the tax deduction u/s 80D. Here’s how:

How Senior Citizens Can Save Tax on Medical Bills Without Insurance

For senior citizens without health insurance coverage, Section 80D still offers relief. They can claim a deduction of up to ₹50,000 annually for hospitalization expenses they incur. This provision ensures that even without a health insurance policy, senior citizen scan claim tax deductions on medical expenses.

What Medical Expenses Are Covered Under Section 80D?

Here’s a brief list of medical expenses you can claim as a deduction under Section 80D:

• Hospitalization Expenses: Costs related to room rent, doctor's fees, and medical tests during hospital stays.
• Daycare Procedures: Expenses for treatments that do not require prolonged hospitalization, such as cataract surgery, dialysis, and chemotherapy.
• Preventive Health Check-ups: Expenses up to ₹5,000 for health check-ups are included within the overall deduction limit.

How to Claim Tax Deductions on Medical Bills

To avail of deductions under Section 80D, you must fulfill the following conditions:

1. Payment Mode: Ensure all medical expenses and insurance premiums are paid using digital methods such as debit/credit cards, UPI, or net banking. Cash payments are not eligible for deductions.
2. Documentation: Maintain all documents, bills, and records, such as invoices and payment receipts. You don’t need to present this when filing your ITR, but if the tax authorities ask you in the future, you must present it.
3. Tax Filing: While filing Income Tax Returns (ITR), accurately report the deductions. Although submission of supporting documents is not mandatory during filing, they should be readily available upon request.

Other Tax Benefits for Senior Citizens on Medical Expenses

Within Section 80D, there are additional provisions where you could save more income from taxes. Here’s how:

• Section 80DD: Offers deductions for expenses incurred on medical treatment, training, and rehabilitation of a dependent with a disability. The deduction limit is ₹75,000 for dependents with disabilities and ₹1,25,000 for severe/permanent disabilities.
• Section 80DDB: Allows deductions for medical expenses incurred on certain critical illnesses such as cancer, Parkinson's disease, or kidney failure. Senior citizens can claim deductions of up to ₹1,00,000 under this section. Here’s the complete list of diseases.

Common Mistakes to Avoid While Claiming Tax Benefits

Here are a few rules of thumb while claiming a tax deduction u/s 80D of the Income Tax Act:

1. Avoid Cash Payments: Only non-cash payments qualify for deductions. This can be a credit card payment, cheque, UPI, etc.
2. Maintain Proper Records: Keep all relevant medical bills and payment proofs organized. You don’t need to submit these while filing ITR but must keep them for tax authorities if required.

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Conclusion

Senior citizens can significantly reduce their tax liability by effectively utilizing the provisions of Section 80D. Understanding and applying these deductions can lead to substantial financial relief. But always maintain bills and other records to ensure you have all the proofs if required.

Disclaimer: Deductions are available only if you opt for the Old Tax Regime. It is not available under the New Tax Regime (Section 115BAC). The 2025 Union Budget proposed several changes in both regimes. Always consult a tax professional to see which one suits you better.