Budget 2018 has benefits for senior citizens
The Budget 2018 plans to increase the limit of deduction under section 80 D of the Income-Tax Act, 1961 for senior citizens to Rs 50,000 from Rs 30,000.
The premium paid towards health insurance policies qualifies for deduction under Section 80D of the Income Tax Act. The benefit is available for health insurance premiums paid for oneself, spouse, children, and parents. It does not matter whether children or parents are dependent on you or not.
Presently on the premium paid, the maximum deduction that can be availed is Rs 25,000 a year, provided the age of the individual as well as that of the other family members insured is not above 60 years. The quantum of tax benefit depends on the age of the individual who is medically insured.
If the premium paid by an individual is towards a health policy for his or her parent who is a senior citizen aabove the age of 60, then maximum is capped at Rs 30,000. A taxpayer can, therefore, maximise tax benefit under section 80D to a total of Rs 55,000 if his age is below 60, while parents' age is above 60.
For those tax payers who are above the of age 60 and are also paying health insurance premium for their parents, the maximum tax benefit under section 80D would therefore be a total of Rs 60,000.
Within the maximum limit of Rs 25,000 or Rs 30,000 (as per age), preventive health check-ups get a benefit of up to Rs 5,000. This means, if you pay a premium of Rs 20,000 towards Mediclaim and undergo a health check-up costing Rs 5,000, a total of Rs 25,000 can be availed under section 80D.
Senior citizens will also get exemptions in income of Rs 10,000 from banks FD and post offices.