Medical Expenditure – Know your Tax benefits

In absence of a comprehensive health insurance cover, medical expenditure may become one of the biggest expenditures if any member of your family falls ill. Even if a protection cover is in place, one may have to incur sizable expenses on medical tests and medicines as all the expenses may not fulfill the conditions for cashless procedures or reimbursements.

So, in case you have spent a lot on medical checkups, treatment, and medicines for yourself and/or for family member(s), you would like to have some relief through tax benefits.

Although the Income Tax Act permits deductions on medical expenditures, you need to know if you are eligible to claim the benefits.

Provisions u/s 80D

If no member of your family (i.e. self, spouse and children) is a senior citizen, you may claim deductions up to INR 25,000 on health insurance premium and preventive health checkups (up to INR 5,000 within the limit of INR 25,000) and no other medical expenditures are allowed as deduction.

However, if any of your family members (excluding parents) is a senior citizen, you may claim deductions up to INR 50,000 on health insurance premium and preventive health checkup (up to INR 5,000 within the limit of INR 50,000), or, in absence of any health insurance cover, deductions up to INR 50,000 on medical expenditure and on preventive health checkup (up to INR 5,000 within the limit of INR 50,000).

In the case of parents, if none of them is a senior citizen, the same deductions may be claimed as allowed for self and family, where none of them is a senior citizen.

However, in case of senior citizens’ parents, you may claim tax deductions up to INR 50,000 on health insurance premium, preventive health checkup (up to INR 5,000 within the limit of INR 50,000) and medical expenditures, irrespective of having health insurance cover or not.

Provisions u/s 80DD

If any of your family members is a person with a disability, you may claim deductions on medical expenditures irrespective of his/her age.

Deduction up to INR 75,000 is allowed on maintenance, including medical expenditures, for dependent with disability and up to INR 1,25,000 for dependent with severe disability.

Provisions u/s 80DDB

Section 80DDB allows deductions up to INR 40,000 on medical expenditure for specified diseases for self or dependent (INR 1,00,000 if self or dependent is a senior citizen). The specified diseases include Neurological Diseases, Malignant Cancer, AIDS, Chronic Renal failure and Hematological disorders.

Provisions u/s 80U

If an assessee himself/herself is a person with a disability, he/she may claim the same deductions as available to a dependent with disability u/s 80DD, depending on the degree of disability.

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