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Is there a tax benefit on medical expenses?
Relax With Tax |
September 09, 2005
You have a question about House Rent Allowance, medical allowance or even a general tax query.
Here's where we step in with our experts, Relax With Tax.
Can I get a tax rebate or exemption on the expenditure I incurred for my parents' treatment?
Is it included in the maximum limit of Rs 1,00,000 under Section 80C?
- Dr Faruqui
The deduction under Section 80C is for specified investments and expenditure.
- Provident Fund
- Public Provident Fund
- Life insurance premium
- Pension plans
- Equity Linked Saving Schemes of mutual funds
- Infrastructure bonds
- National Savings Certificate
Payments towards the principal amount of your home loan are also eligible for an income deduction.
The amount spent on medical treatment is not included.
This section allows deduction of expenses on medical treatment of specified ailments prescribed under Rule 11DD of the Income Tax Rules.
List of diseases/ ailments that qualify for a tax break
The list is as follows:
1. Neurological diseases where the disability level has been certified to be of 40% and above. These include:
- Dystonia Musculorum Deformans
- Motor Neuron Disease
- Parkinson's Disease
2. Malignant cancer
3. Full blown Acquired Immuno Deficiency Syndrome, commonly referred to as AIDS
4. Chronic renal failure
5. Hematological disorders. These include:
You need to consult your doctor to ascertain if your parent's problem falls into any of the above categories.
If yes, deduction upto Rs 40,000 or the actual expenditure incurred, whichever is lower, would be eligible.
I have spent around Rs 1,00,000 on a Pacemaker device for my mother.
Can I claim an income tax deduction? Can such a declaration be given to my employer for calculating the tax?
- Badri Narayanan K
From the bare facts mentioned by you, we don't think you are eligible for any deduction for the medical expense incurred by you.
The eligible ailments prescribed under the Rule 11DD of Income Tax Rules do not apparently cover your mother's case.
Please read the answer above.
My taxable income is around Rs 2,40,000. I do not have any separate medical allowance in my salary account.
Can I present medical bills worth Rs 15,000 to my company in January and claim tax benefits up to that amount?
In other words, is a salary component like medical allowance mandatory in salary structure?
- Prashant K
There needs to be a reimbursement component to your salary structure wherein the amount is reimbursed based on medical bills submitted.
Any payment not supported by bills, or a component like a fixed medical allowance, is fully taxable in the hands of the employee.
You need to enquire with your company if some portion could be transferred from special/ flexible allowance to this reimbursable component.
If they agree, you could go ahead and avail of this benefit.
We also suggest you read The difference between medical reimbursement and allowance.
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