Sections 80D, 80DD, 80DDB, 80U: Medical based Deductions
Deduction for Medical Insurance Premium for Individual and HUF (Section 80D)
Any Premium paid by the taxpayer individual (may be resident/non-resident or Indian citizen/foreign citizen) or a Hindu undivided family (may be resident or non-resident) for the approved medical insurance by IRDA, taken on the health of the taxpayer, spouse, dependent parents or dependent children in case of Individual and health of any member of the family in case of HUF, is allowed as a deduction, subject to a ceiling of Rs 15,000. The deduction is available only if the premium is paid out of the income chargeable to tax, and is not paid in cash. For the HUF the deduction is available for any member of the family.
In case the medical insurance premium is paid for medical insurance for a senior citizen who is of the age of 65 years or more at any time during the relevant previous year, an enhanced deduction of Rs 20,000 is allowed.
Deduction for Medical Treatment of a Dependent with Disability (Section 80DD)
Deduction under this section is available to an individual and HUF who:
- Incurs any expenditure for the medical treatment (including nursing), training and rehabilitation of a disabled dependent; or
- Deposits under any approved scheme of Life Insurance Corporation or any other insurer or the administrator any amount for the maintenance of a disabled dependent or for an annuity or a lump sum amount to be paid to the dependent or the nominee for the benefit of the dependent, in the event of the death of the individual depositing the money.
Under sections 80DD a Fixed deduction of Rs 50,000 is available. For the dependent with a severe disability (over 80 per cent), the deduction is Rs 1,00,000.
If the death of the dependent occurs before that of the assessee, the amount in the scheme is returned to the individual and is taxable in his hands in the year that it is received. An individual should furnish a copy of the issued certificate by the medical board constituted either by the Central government or a state government in the prescribed form, along with the return of income of the year for which the deduction is claimed.
Deduction in respect of medical treatment (Section 80DDB)
This deduction is available to and individual who is resident of India or HUF who, during the previous year, actually paid for the medical treatment of such disease or ailment as may be specified in the rules made in this behalf by the Board for himself or a dependent relative (or any member of Hindu undivided family in case of HUF). The maximum amount of deduction is Rs. 40,000 or Rs. 60,000 (for senior citizen). The assessee must furnish a certificate in such form from a neurologist, an oncologist, a urologist, a hematologist, an immunologist or such other specialist, as may be prescribed, working in a government hospital. The amount received back from health insurance is to be reduced from amount paid for medical treatment to arrive at the figure entitled to deduction under this section.
(For the purposes of section 80DDB, the following shall be the eligible diseases or ailments:
(i) Neurological Diseases where the disability level has been certified to be of 40% and above,—
(a) Dementia; (b) Dystopia Muscularity Deformans; (c) Motor Neuron Disease; (d) Ataxia; (e) Chorea; (f) Hemiballismus; (g) Aphasia; and (h) Parkinsons
(ii) Malignant Cancers;
(iii) Full Blown Acquired Immuno-Deficiency Syndrome (AIDS);
(iv) Chronic Renal failure;
(v) Hematological disorders:
(a) Hemophilia; (ii) Thalassaemia.)
Deduction in case of a person with disability (section 80U)
The deduction is available to an individual (Indian citizen and foreign national) who is resident of India, and who suffers from not less than 40 per cent of any disability given here: blindness, low vision, leprosy-cured, hearing impairment, locomotor disability, mental retardation and mental illness.
The taxpayer shall have to furnish a copy of the certificate issued by the medical authority on a given format. Under section 80U a deduction of Rs 50,000 is available. For the dependent with a severe disability (over 80 per cent), the deduction is Rs 1,00,000.