Section 80D intricately defines the eligibility criteria for the health care expenses that are considered under the purview of the Income Tax Act. Since health care costs may differ from person to person, section 80D has different tax deductions on the basis of different health care costs. The eligibility of the health care costs is as follows:

1. In the case of health insurance premium (Section 80D)

  • In case of the individual, Rs. 25,000 for himself and his family
  • If individual or spouse is 60 years old or more the deduction available is Rs 50,000
  • An additional deduction for insurance of parents (father or mother or both, whether dependent or not) is available to the extent of Rs. 25,000 if less than 60 years old and Rs 50,000 if parents are 60 years old or more.
  • For uninsured super senior citizens (80 years old or more) medical expenditure incurred up to Rs 50,000 shall be allowed
  • A deduction of Rs. 5000 will be allowed under this section for payment of preventive health check-up of either the individual himself or his family members which includes spouse, parents and dependent children.This deduction is NOT in addition to the deduction of Rs.25000/50000 stated above, but is included in the above deduction.

Tax deductions

2. In the case of critical diseases (section 80DDB)

Deduction under section 80DDB of the Income Tax Act is available towards the amount actually paid for the medical treatment of the specified disease.

Amount of deduction –

Lower of the following amount is allowed as a deduction under section 80DDB –

Amount actually paid; or

A sum of INR 40,000

It is important to mention here that deduction, in case the amount actually paid is in respect of either the assessee or his dependant or any member of Hindu Undivided Family, who is a senior citizen, shall be lower of –

Amount actually paid; or

A sum of INR 1,00,000

Other important points –

1. Deduction under section 80DDB is available only to an assessee who is resident in India. In other words, a deduction is not available to a non-resident person.

2. For claiming deduction under section 80DDB, it is mandatory to obtain a prescription of the medical treatment from an oncologist or a neurologist or a haematologist or a urologist or an immunologist or such other specialist.

3. In the case of a disabled dependent people ( Section 80DD

Under Section 80DD, medical expenses incurred on the treatment of a differently-abled person with 40% or more disability can claim a tax deduction. They can claim up to Rs 75,000 for spending on medical treatments of your dependents (spouse, parents, kids or siblings) who have 40% disability. The tax deduction limit of upto Rs 1.25 lakh in case of severe disability (i.e. disability of 80% or above) can be availed. To claim this deduction you need to submit a medical certificate obtained from a specialist doctor along with a 10-IA form. Some of the disabilities which are eligible for tax) benefits are; severe blindness (low vision), leprosy, mental retardation, hearing impairment, autism, locomotor disability, mental illness, cerebral palsy, and much more.

4. In the case of persons with disability (Section 80U)

Under Section 80U, a person with over 40% and 80% disability, can claim a tax deduction up to Rs 75,000 and Rs 1.25 lakhs, respectively. However, to get the deduction, an individual is required to submit an authenticated certificate obtained from a specialist doctor. The Section 80U considers the same list of disabilities as that of Section 80DD. There is a fine line difference between section 80DD and section 80U. The Section 80DD primarily focuses on the dependent people and thus provides with an extended tax benefit from health care expenses. Whereas, Section 80U primarily involves an individual, where an individual who is suffering from some disabilities can avail tax benefit and deduction from the annual taxable income.

5. In the case of insurance premium payment via cash:

Though insurers allow you to pay premiums in cash, you won’t get any tax benefits on premiums paid through cash. It means, to get tax benefits, you should pay your premium via internet banking, credit/debit card or any mode other than cash.

These are some of the major health care expenses which are eligible for tax deductions. Remember, as medical costs are increasing at an unprecedented rate, health insurance is a necessity. Therefore, restrain yourself from buying the policy for tax benefits only.

(Republished with amendments by TaxGuru Team)

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One Comment

  1. NANDAKUMAR A says:

    “For uninsured super senior citizens (80 years old or more) medical expenditure incurred up to Rs 50,000 shall be allowed”

    Please note the Word “very” omtt. by the Act No. 13 of 2018, w.e.f. 1-4-2019. All Senior will get the benefit of this provision

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January 2021