Budget 2021: Senior citizens expect increase in tax benefit on health insurance

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Updated: January 29, 2021 11:46 AM

Budget 2021 Expectations: With medical expenses surging every year, the need for higher health insurance cover for senior citizen is very crucial.

Insurance Budget 2021 Expectations, Budget 2021 Expectations for InsuranceThe impact of the coronavirus in the year 2020 has also led many Indian promoters to face challenges, which has significantly impacted the growth and development of the insurance sector.

Budget 2021 Expectations Health Insurance: Senior citizens will be looking forward to the announcements of Budget 2021 to be presented by the Finance Minister Nirmala Sitharaman with keen interest. Medical inflation is supposed to be more than general inflation and has always put the senior citizens at a back foot. Health insurance plans and exclusive health plans for senior citizens have been a saviour to them to some extent but still higher premium in such plans keeps many seniors buy inadequate coverage.

In these times, when COVID-19 pandemic has brought the focus on health care costs, the importance of keeping a health insurance plan has increased manifold. “If there is a change in the personal income tax slab, increasing the basic exemption limit will be helpful for a senior citizen as well. With medical expenses surging every year, the need for higher health insurance cover for senior citizen is very crucial. Higher exemption limit under Sec 80D for the health insurance premium will bring relief on tax as well as health cover front,” says Harshad Chetanwala, Co-Founder- MyWealthGrowth.com

Currently, for those who are below age 60, the tax benefit on the premium paid is up to Rs 25,000. This includes self, spouse and children and the health cover could be a Mediclaim, Family Floater, Critical Illness etc. the premium paid towards any of these schemes gets deducted from the gross income under section 80D. For those who are above age 60, the maximum limit for tax benefit is Rs 50,000.

“Senior citizens incur heavy medical expenses in addition to a high medical insurance premium. On this front, the ceiling for Health Insurance premium along with the deduction for medical expenses for senior citizens as per the provisions of section 80D might be increased to Rs 1 Lakh,” says Raghunathan Parthasarathy, Associate Partner – Tax & Regulatory Services, BDO India.

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