Very senior citizen can get tax benefit of up to Rs 30,000 under Section 80D on health insurance

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July 31, 2017 4:10 AM

Section 80D of the Income-tax Act, 1961 covers provisions relating to tax benefits available on account of payment of medical insurance premium and medical expenses for self and family members.

Interest on fixed deposit is not exempt from income tax in the hands of any taxpayer, including senior citizen.

What are the benefits available in respect of expenditure incurred on medical insurance premium / medical expenditure to a senior citizen/very senior citizen?

– Dhiraj Saraf

Section 80D of the Income-tax Act, 1961 covers provisions relating to tax benefits available on account of payment
of medical insurance premium and medical expenses for self and family members. Any payment towards health insurance, preventive health checkup or contribution towards notified Central Government health schemes for self, spouse and dependent children of individual is allowed as deduction subject to a limit of Rs 25,000. Where such expenses is towards medical expenditure of very senior citizen (i.e., 80 years or above) not covered by health insurance, deduction is allowed up to a limit of Rs 30,000. Further, a separate deduction is allowed for the health insurance, preventive health checkup or contribution towards notified Central Government health schemes for parents of individual to the extent of Rs 25,000 which is extended to the limit of Rs 30,000 in case of parents being very senior citizens.

My father is a senior citizen and has a few fixed deposits in his bank. Is he supposed to pay tax against the interest, and should it be added to his pension to calculate tax liability. The bank is already deducting 10% as TDS. Do we need to claim that too?
—Ravilochan Pattabiraman

Interest on fixed deposit is not exempt from income tax in the hands of any taxpayer, including senior citizen. Thus, pension income and interest income on FD shall be added to calculate the total income of your father. The basic exemption limit in case of a resident individual of the age of 60 years or more (senior citizen) and resident individual of the age of 80 years or more (very senior citizens) is Rs 3 lakh and Rs 5 lakh, respectively for the financial year 2016-17. The tax deducted by the bank shall be available for credit against tax payable, if any, on the taxable income of your father.

The writer is the founder of RSM Astute Consulting Group.
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