Medical insurance premium paid offers tax benefits under Section 80D of the income tax Act. The Finance Act, 2018 offers higher deductions for medical premiums paid for senior citizens.
No one over 60
In case no one in the family is over 60, the deduction is up to Rs 25,000. For medical insurance paid for parents below 60, deduction is up to Rs 25,000. Hence total deduction one can claim is up to Rs 50,000.
Either parent over 60
In case only one of the parents is over 60, tax benefit of up to Rs 50,000 for medical insurance paid for parents is allowed. Also, premium paid for family—self, spouse and children, enjoys Rs 25,000 deduction. This makes the total deduction available up to Rs 75,000 in a year.
Eldest member in the family over 60
Where one family member— self, spouse or children— is over 60, one can claim up to Rs 50,000 in tax benefit on medical insurance. Additionally for parents over 60, medical insurance paid can fetch up to Rs 50,000 in tax benefit. So, total deduction in this case can be up to Rs 1 lakh a year.
One can access the following link on the income tax department website to check amount of deduction applicable for assessee under Sec 80D for a particular assessment year:
The premium payment receipt and policy copy which shows the name of the family members and their relation and age should be preserved to claim the deduction.
Points to note:
- Benefits under Section 80D are in addition to Section 80C tax breaks of up to Rs 1.5 lakh.
- Amount available for senior citizens’ deduction can also be spent for medical expenses.
- Health insurance premium paid at one go allows tax benefits for the number of years of insurance cover.