Claim your tax deduction on health checkup and specific treatments

Maximise savings by tapping into lesser-known deductions besides the one on health insurance premium

The significance of an annual health checkup is undeniable, yet many of us put off scheduling one. Not only does a regular checkup keep us informed about our health status, it also offers financial benefits in the form of income-tax deductions. Many people do not avail of this and other lesser-known health-related tax benefits due to a lack of awareness.

Soayib Qureshi, partner, PSL Advocates & Solicitors, says, “Section 80D, 80DDB, and Rule 11DD of the Income-Tax (I-T) Act, 1961, allow taxpayers to reduce their taxable income by claiming deductions on medical expenses. This in turn encourages individuals to prioritise their family and their health and well-being.”

Preventive health check-up expenses

Section 80D of the I-T Act, 1961, offers a deduction for expenses related to preventive health check-ups. Pranav Bhaskar, partner, SKV Law Office, says, “An individual can claim a deduction of up to Rs 5,000 for expenses incurred on health check-ups for himself, spouse, children, and parents.” This deduction is a part of the overall limit under Section 80D.  

Section 80D of the I-T Act, 1961, offers deductions to individuals and Hindu Undivided Families (HUFs) on their health insurance premiums. An individual can claim a deduction for medical insurance premiums paid in a financial year up to Rs 25,000 for self and family (where self, spouse, and children are all under the age of 60), and an additional Rs 25,000 towards expenses incurred on parents under the age of 60, and Rs 50,000 on parents over the age of 60.

Qureshi says, “The provision prescribes an allowance of Rs 5,000 for any payment made for preventive health check-ups and is included within the aggregate allowance for an individual.”

Expenses under preventive health check-ups include the fees paid to a doctor and tests undergone as part of this process.

Prateek Goyall, partner, MV Kini, says, “The deduction can be availed even if one has made cash payments.”

A person who has had a check-up or has scheduled one before March 31, 2024, can avail of this deduction. While cash payment is permitted, it is advisable to make non-cash payments to have proper records.

Medical treatment of specified ailments

Section 80DDB provides a deduction to resident individuals and HUFs for expenses incurred on the treatment of specified diseases. Naveen Wadhwa, vice president, research and advisory, Taxmann, says, “The expense may be incurred by an individual on himself or any dependent person (spouse, children, parents, brothers, and sisters) or by an HUF on any of its members.”

The assessee is eligible to claim a deduction under this section for the amount actually paid for treatment or Rs 40,000, whichever is lower. Wadhwa says, “The limit of Rs 40,000 increases to Rs 1 lakh if the expenditure is incurred on the treatment of a senior citizen (i.e., a resident individual aged 60 years or above).” Goyall cautions that one should keep in mind these age-specific limits on maximum deduction.

Ensure compliance with Rule 11DD of the Income-Tax Rules, 1962, which specifies the nature of diseases and ailments for which an allowance can be claimed. Specified diseases include various cancers, AIDS, renal failure, and dementia, among others.

Ritika Nayyar, partner, Singhania & Co., says, “To claim this deduction, the taxpayer must obtain a prescription for the medical treatment from a neurologist, oncologist, urologist, haematologist, immunologist, or other specialist as prescribed.”

Maneet Pal Singh, partner, I.P. Pasricha & Co. emphasises the importance of maintaining detailed records. 

Taxpayers should arrange for medical certificates on time since most of the sections require them. The certificate should cover the financial year for which the deduction is claimed and not be outdated.