Big Questions

Can you save tax on the treatment of a serious disease?

Read on to know if you can avail income tax benefits on medical expenditures

Section 80DDB: Are medical expenses tax deductible?

It is very sorry to know about the pain that someone goes through when they are suffering from any disease or ailment. We wish all such people a speedy recovery. Yes, you do get a tax benefit on the treatment of a serious disease under section 80DDB of the Income Tax Act.

Section 80DDB allows resident Indians to claim deductions with respect to any expenses incurred towards treating certain specified medical diseases or ailments for themselves or dependents, which can include, a spouse, children, siblings and parents.

You can claim benefits only on certain specified critical illnesses such as:

  • Neurological diseases,
  • Malignant cancers,
  • Full-blown Acquired Immunodeficiency Syndrome (AIDS),
  • Chronic renal failure, and
  • Haematological disorders

You can claim bills up to Rs 40,000 or the amount paid, whichever is less. If the patient is a senior citizen, then bills up to Rs 1 lakh or the amount paid, whichever is less, can be claimed. However, do note that deduction can be claimed only when you spend the money on treatment. If the patient is insured and payment is received from an insurer or reimbursed from an employer, such insurance or reimbursement received shall be subtracted from the deduction.

For example, suppose your mother is a senior citizen and the treatment costs were Rs 1.20 lakh. Your employer reimbursed you with Rs 30,000 and you bore the other Rs 90,000. Since Rs 90,000 is less than Rs 1 lakh, you can claim a deduction up to Rs 90,000.

But also make sure that for claiming the deduction, it is mandatory to provide proof of treatment. Therefore, it is compulsory to obtain a prescription for the treatment from a qualified doctor. The prescription must include:

  • Name of the patient
  • Age of the patient
  • Disease or ailment name, address, and registration number of the specialist doctor issuing the prescription.

Suggested read: All about tax deductions

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