Section 80D

Section D allows tax deduction on the medical insurance premium paid and medical expenditure incurred. It is levied either on the premium paid for a medical insurance policy for the taxpayer himself or of a close family member. Section 80D of Income Tax offers a deduction over and above to the deductions done as per Section 80C of the Income Tax Act.

Deduction under Section 80D

For Individuals

 The maximum deduction allowed is Rs 25000 each financial year for the premium paid in the form of health insurance for self and family.

For senior citizens, the maximum permissible deduction is INR 50,000 per financial year.

Medical Insurance for Parents

The maximum permissible deduction is INR 25,000 per financial year on the premium paid for health insurance for parents. In the case of senior citizen parents, the maximum permissible deduction allowed is INR 50,000 per fiscal year on the premium paid.

In addition to premium paid, an additional exemption of Rs 5000 given in every financial year of the expenses incurred towards the health check-ups. This limit covers the check-up cost for all the family members including kids' spouses or parents. Rs 5,000 is included within the overall deduction limit that is Rs 25,000.

For Hindu Undivided Family

For a HUF, the maximum permissible amount of deduction allowed is INR25000 for the premium paid on the health insurance scheme of any family member. 

Premium paid for senior citizen member (i.e., any resident individuals aged 60 years or above).

When medical expenditure is incurred on the health checkups of a very senior citizen person and no amount is paid in respect of the health insurance of such person.

Eligibility under Section 80D

Resident individual can get the deduction as per Section 80D for the premium on the health insurance services provided to family members are mentioned below:

Self

Children

Spouse

Parents

A Hindu Undivided Family can also make tax deduction under Section 80D. The premium payments made towards the medical insurance only to a HUF member. The tax deduction is allowed up to the maximum permissible limit of the act.

Section 80D Exemption Limit

The difference between Section 80C and Section 80D:

Section 80C is more popular and it includes a wide range of products where the maximum tax deduction can go up to Rs 1.5 Lakhs per fiscal year.

Section 80D basically deals with medical insurance payments only. Under Section 80C a wide gamut of payments such as investments made in various tax savings schemes, tax savings FD, life insurance premium & mutual funds, etc. is covered.

Some key provisions under Section 80D are:

• Premium paid through cash is not entitled to a deduction.
• Premium is paid for dependent children is included in the exemption limit. On the other hand, the premium paid for earning children is excluded in this section.
• In the case of spouse and parents, even if they are not dependent, one can claim benefits under this section.
• The service tax paid on health insurance policy is not eligible for deduction as the same is paid besides the premium amount & collected by insurance agencies.
• Deductions on the health check-up expense includes all the dependents in the family and not individuals (it is an overall limit and not per individual).

Section 80DD

Any resident individual or HUF is eligible for a tax deduction on the expenditure incurred towards the maintenance of dependent disabled relative under Section 80DD of the Income Tax Act, 1961. This deduction cannot be availed by a taxpayer who is himself or herself disabled. The deduction is available for below-mentioned expenses:

• Expenditure incurred for taking any medical treatment, training, nursing & rehabilitation of a disabled dependent relative.
• Amount paid for the scheme of LIC/UTI which is meant for maintenance of disabled dependent relative.

For the inclusion of dependent disabled relative, here are the important terms & conditions.

Disabled Person

• In the case of the individual taxpayer: spouse, parents, children, brother, and sisters of the individual or any of them who is mainly or wholly dependent on such individual.
• In the case of HUF: Any member of the HUF, who is mainly or wholly dependent on such HUF subject to the condition that the dependent person has not claimed any deduction under section 80U.

Disability

The cases where a person is suffering from disability include low vision, syndrome, blindness, leprosy -cured, loco motor’s disability, hearing impairment and any kind of mental illness or low mental retardation including autism.

A person with severe disability means: -

The cases where a person who has a serious disability (80%) due to single or multiple disabilities shows the symptom of cerebral palsy, autism, and mental retardation.

Permissible Limits

The maximum permissible deduction under this section is up to INR 75,000 towards the expenditure incurred in the maintenance of dependent disabled relative, irrespective of its amount. In cases of severe disability i.e., disability of 80% or above, then the amount of deduction will be INR 1,25,000.

Other Important terms & conditions in Section 80DD

• The taxpayer should obtain the copy of the certificate issued by the medical authority. A fresh certificate is mandatory post-reassessment of disability after the expiry period mentioned in the initial certificate.
• If the dependent predeceases the taxpayer or the member of HUF referred to above, then the amount paid or deposited in above shall be charged to tax for the previous year in which such sum is received.
• The certificate can be obtained from a specialist doctor as per the cases applicable.
• Certificate from the government hospital is not mandatory, and it can be obtained from a private hospital.
• In case, the patient is being treated in any government hospital, then required to submit the medical certificate issued by a resident specialist doctor. The specialist doctor should be a post-graduate in General/Internal Medicine, or an equivalent degree recognized by the Medical Council of India.
• Certificate in Form 10L is no longer mandatory.

The certificate should carry below-mentioned points:

• Name & age of the patient,
• Nature & name of the ailment,
• Name, address qualification & registration number of the doctor issuing the prescription.
• For cases where the treatment is being done in a government hospital, the name & address of the Government hospital is required.

Section 80DDB

Under the Section 80DDB of the Income Tax Act, an individual can claim a deduction on the expenditure incurred on medical treatment of serious illnesses. The provisions in this regard are as follows:

• You must be a resident individual or an HUF
• The deduction applies to the actual amount paid by the individual/HUF on medical treatment of a specified disease, as prescribed by the Board.
• In cases of the individual taxpayer, the above-mentioned expenditure should be on medical treatment of an individual or wholly/mainly dependent, children, spouse, parents or siblings of the individual.
• In the case of an HUF, the expenditure to be incurred on the treatment of any family member, who is wholly/mainly dependent on HUF.
• The taxpayer is required to obtain the recommendation for the specified medical treatment from any recognized oncologist, neurologist, urologist, immunologist, hematologist or any other specialist, as may be prescribed.

Diseases covered under Section 80DDB

The nature of diseases and ailments which are included for deduction under Section 80DDB are mentioned in Rule 11DD of Income Tax and the same are as follows:

• Some Neurological diseases are identified by a specialist where the level of disability has been certified to be 40% and above. 
• It covers diseases such as Dystonia Musculorum Deformans, Chorea, Motor Neuron Disease, Aphasia, Parkinson's disease, and Hemiballismus.
• Malignant Cancer
• AIDS- Acquired Immuno-Deficiency Syndrome
• Chronic Renal failure
• Hematological disorders like Hemophilia or Thalassemia.

Amount of deduction

Amount being spent on medical treatment specified above or Rs 40,000 whichever is less. For senior citizens (aged 60 and above) the deduction would be the expenditure incurred or Rs 100,000, whichever is lower.

Key Terms & Conditions for availing Section 80DDB Tax Benefits

• The taxpayer needs to obtain a copy of the certificate in Form No.1, duly issued and attested by a urologist, neurologist, immunologist, hematologist or any such specialist.
• The specialist must be working in Government recognized hospital.
• In case the taxpayer is receiving reimbursement for such expenditure from any other insurer or his employer, the net amount shall be deducted from the total amount of tax exemption which is computed in an aforesaid manner.
• The taxpayer should obtain a copy of the certificate given by the medical authority. A fresh certificate is mandatory post-reassessment of disability after the expiry period mentioned in the initial certificate.
• If the dependent predeceases, as above referred in the case of the taxpayer or the member of HUF referred to above, then the amount paid or deposited shall be charged to tax in the hands of the taxpayer for the previous year in which sum is received.

The certificate should carry below mentioned points:

• Name & age of the patient,
• Nature & name of the ailment,
• Name, address qualification & registration number of the specialist issuing the prescription.
• For cases where the treatment is being done in a government hospital, name and address of the Government hospital are required.