In order to reduce your tax burden by allowing deduction of medical expenses to a certain limit, the Income Tax Act has made some key provisions in this context.ĭeduction for medical expenses can be claimed u/s 80DDB for medical expenditure incurred in case of self, spouse, children, parents or dependent siblings. These days even medical consultations, simple small surgeries or minor medical treatments can burn a hole in your pocket. Tax Deduction U/S 80DDB for Medical expenses In case of an assessee being a senior citizen, tax exemption allowed on medical insurance is up to INR 50,000 per year for FY 2018-19. Tax Deduction U/S 80DĪ deduction of INR 25,000 per annum can be claimed for medical insurance done for self, spouse and children and INR 25000 for parents (Whether dependent or not) You need to get a medical insurance done from any insurance company and pay an annual premium to claim the premium amount paid as tax exemption. To claim this standard deduction, there is no need to submit medical bills to your employer.Ī salaried employee either receives a fixed medical allowance or is allowed a reimbursement by the employer.
CLAIMING MEDICAL EXPENSES ON TAXES 2020 PLUS
Tax exemption that can be claimed in lieu of medical bills plus transport allowances is capped at a standard deduction of INR 40,000 per year.įrom FY 2018-19, a standard deduction of INR 40,000in lieu of travel, medical expense reimbursement and other allowances has been proposed for salaried employees and pensioners.No reimbursement can be claimed at the time of filing the income tax return. These medical bills need to be submitted only with the employer.These medical bills can relate to medicines bought from medical shops or pharmacies or treatment of an ailment done at any clinic, private hospital or public hospital.Medical expenses incurred on self, spouse, children or completely dependent parents & siblings can only be claimed for exemption.The following conditions need to be fulfilled in order to claim this exemption : Reimbursement of medical expenses to salaried employees by their employers does not come under the tax ambit. These expenses include those made for treatment of self as well as family members/dependents. One of these exemptions relates to medical bills and related expenses incurred during the Financial Year by an individual. There are a number of deductions and exemptions allowed under the Income Tax Act. Reimbursement of Medical bills by Employer Medical allowance shall be fully taxable under the head ‘Income from Other Sources’ in such cases. If medical allowance is received by the employee, such reimbursement can’t be claimed as a deduction from taxable income. Medical allowance is a fixed amount paid by some employers to their employees on a monthly basis. These deductions and exemptions have been detailed as below Medical Allowance These provisions help in decreasing the tax burden by providing various deductions and exemptions for payment of medical expenditures, insurance premiums, etc. In order to provide some relief to the society at large and individuals in particular from these escalating medical costs, some provisions have been made in the Income Tax Act, 1961.
It also states that 72% of the total out-of pocket expenses relate to purchase of medications both before and after medical procedures. The paper points out that the majority of this treatment expenditure (approximately 74%) incurred in India is for outpatient treatment whereas only 26% expenditure relates to in-patient procedures that require hospitalization of 24 hours or more.
According to an analysis published by the world’s leading medical journal ‘Lancet’, Indians pay around 78% of their medical expenses out of their own pocket. The main culprits for this include changing food habits and poor lifestyle choices. In recent years, the incidence of health problems and their treatment costs have increased by leaps and bounds all over the world. Medical Bill Tax Exemption is no longer separately available subsequent to the introduction of Standard Deduction from FY 2018-19 onwards.
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