Exemption in respect of Medical Expenses – Individual Taxpayers

One can not plan medical expenses, both in terms of timing and amount and cannot avoid or control such expenses, but the fact that medical expenses can provide tax exemption, gives a sigh of relief to the taxpayer. In order to claim medical expenses, one should know the relevant section of Income Tax Act to claim medical expenses, keep documentary record of medical bills, doctor’s prescription and claim medical expenses on the same financial year in which it is incurred as they cannot be carried forward. Section 10 – Medical Treatment Expenses Reimbursement Section 10 of the Income Tax Act provides medical expenses exemption if your salary package includes medical reimbursement as perquisites. Exemption is available on expenses incurred for you and your family for any diseases except cosmetic treatment and eye glasses. Exemption limit is Rs.15000 per year, supported by adequate documents. Section 80DDB – Medical Treatment Expenses Section 80DDB of the Income Tax Act provides medical expenses exemption on those incurred for you and your dependents for certain diseases. Exemption limit is Rs.40,000 per year and if you or your dependent is a senior citizen, then limit increases to Rs.60,000 per year. You need to submit form 101, issued by a specialist doctor working in government hospital. Section 80DD – Expenses on Physically Disabled Section 80DD of the Income Tax Act provides exemption for expenses on your physically disabled dependent. Exemption is allowed on expenses namely Medical Treatment Expenses and Payment or deposit under an approved scheme of LIC or UTI. Exemption limit is Rs.50,000 per year and if disability is severe the limit increases to Rs.60,000 per year. You need to submit form 101, issued by a specialist doctor working in government hospital.