Avail high tax benefit on senior citizen health insurance policy
Are you ready to embark on a new chapter in your life as a senior citizen? You’ve worked hard for years, and now you deserve to relax, unwind, and enjoy yourself! While you are kicked about starting the second innings and doing all the things you’ve probably previously parked, it is also equally important to take care of your health and wellness. Exorbitant healthcare expenditures can not only upset your plans but also burn a hole in your pocket, even while the country’s medical system improves day by day. As a result, senior citizens’ health insurance is vital because it protects you financially in an emergency. Another advantage of such a mediclaim is that it might assist you in saving money on taxes. Let us see how:
Tax deductions under Section 80D
The insurance premium that must be paid for purchasing any mediclaim is deducted from the policyholder’s income under Section 80D of the Income Tax Act. This tax deduction benefit is available to the policyholder and their spouse and other family members for personal medical care. You can claim a maximum deduction of INR 25,000 per year if you acquire health insurance for yourself, your wife, and your children.
You can also claim an additional deduction of INR 25,000 if you pay the mediclaim insurance premium for your parents if they’re under 60. Further, if you purchase a mediclaim for your senior citizen parents, you can claim an additional deduction of up to INR 50,000.
If the insured and their parents are above 60 years old, the maximum deduction available under section 80D is INR 1 lakh. Apart from this, you may also claim a rebate of INR 5,000 for expenses associated with health check-ups for the entire family.
Income Tax Advantages for Senior Citizens
The government provides different tax benefits to senior and super senior citizens to enable them to enjoy their retirement years while also reducing their tax burden. It’s crucial to label senior citizens and super senior citizens correctly before moving on to these perks.
- Senior citizens – above the age of 60 but under the age of 80.
- Super senior citizens – above the age of 80.
Let’s look at the many tools that senior and super senior citizens can claim deductions:
Interest from deposits
Interest earned on a fixed deposit in a bank or post office deposit, up to a maximum of Rs. 50,000, is deductible from your annual income under Section TTB. Since most of them rely on such deposits, this is one of the tax perks of tremendous comfort.
The ever-increasing medical treatment cost can deplete your retirement savings. Fuss not, as senior or super senior citizens can save tax by claiming up to Rs. 1 lakh for expenses incurred to treat specific disorders like cancer, stroke, and other conditions under Section 80DDB.
TDS on deposit interest has been raised to Rs. 40,000, which implies that even if you invest up to Rs. 6 lakhs in a fixed deposit at a rate of around 7% p.a., you will save tax as a senior or super senior citizen because no TDS will be deducted.
If you have a high-interest income from a bank deposit, fill out form 15H. This form is nothing more than a declaration that allows you to claim certain receipts without paying taxes on them. All you have to do is fill out a 15H form and send it to the bank.
Health insurance premiums
As a senior citizen, you can get a tax break on up to Rs. 50,000 in annual senior citizens health insurance premiums.
Standard pension deductions
The standard deduction is a one-time deduction that salaried workers and retirees can reduce their tax liability. Senior individuals can claim a standard deduction of Rs 50,000 on income obtained from a pension.
Benefits of the Reverse Mortgage Scheme in Terms of Taxation
The Reverse Mortgage Scheme allows seniors to borrow money against their homes for recurring payments. According to the plan, the house will remain in the owner’s name until they die, at which point it will be sold. The payments paid to the older person regularly during their lifetime are completely tax-free.
If you are a super senior or a senior citizen or filing for your parents, remember to take advantage of these tax benefits for yourself.
Staying current on tax regulations and the numerous income tax incentives available to senior citizens health insurance might help you save money in the long run. The tax advantages discussed above can help you manage your funds more effectively. If you’re unsure about how to claim these deductions, you may always seek the advice of a competent financial counsellor or a tax planner.