Sections 80D And 80DDB: Tax Deductions For Seniors On Medical Expenses

Retirement can bring with it unexpected expenses, medical expenses being one of the most prominent of them. The medical inflation rate in India is at 14 per cent, and with the rising costs, managing finances after the halt in regular income can become stressful.

However, under the Income-tax Act, 1961, sections 80D and 80DDB provide deductions of health insurance premiums and expenses related to medical treatment to senior citizens from their taxable income. These benefits are available only under the old tax regime.

Section 80D

Section 80D (in the old tax regime) allows a deduction on health insurance premiums paid for self, spouse, dependent children, and parents. In the case of senior citizens, the maximum deduction available is Rs 50,000 in a financial year.

If the taxpayer pays health insurance premiums both for himself and his senior citizen parents, the total deduction can go up to Rs 1,00,000 (Rs 50,000 for self and family, and Rs 50,000 for parents).

The payments have to be made by using non-cash modes, including debit card, credit card, cheque, or online transfer. Otherwise, cash payments are not eligible except for preventive health check-ups. The claims for the latter are allowed up to Rs 5,000 within the overall limit of Rs 50,000.

Section 80DDB: Deduction For Treatment Of Specified Diseases

Expenditure on the medical treatment of specified ailments like cancer, chronic renal failure, AIDS, and neurological disorders is allowed as a deduction under Section 80DDB.

A senior citizen can claim a maximum deduction of Rs 1,00,000 in a financial year for the cost of treatment for themselves or any of their dependents. This limit is Rs 40,000 for individuals below 60 years of age.

This deduction is available only for expenses that have not been reimbursed by a health insurance company or an employer. To claim the benefit, the taxpayer has to obtain a medical certificate from a specialist doctor at a government hospital.

Documents Needed To Claim Deductions

The bills, disability certificates, and doctors' prescriptions in the prescribed format have to be preserved in the case of Section 80DDB. In case any clarification is sought by the tax department, possessing these documents will ensure smooth verification.

Medical expenses tend to rise with age, and health insurance premiums for senior citizens are usually higher. These provisions help offset part of the cost by reducing the tax liability. Paying premiums through valid modes, maintaining a record in an organised manner, and opting for the old regime can ensure that the senior taxpayers get the full benefit of the available deductions.