Section 80D/ 80DD/ 80DDB/ 80U  
Deduction in Respect of Medical Payment

Section 80D: Deduction in Respect of Medical Insurance

Every individual or HUF can claim a deduction from their total income for medical insurance premiums paid in any given year under Section 80D. This deduction is also available for top-up health plans and critical illness plans.

The deduction benefit is available not only for a health insurance plan for self but also premium paid for the policy to cover a spouse, dependent children or parents.

Amount of deduction 

For premium paid to effect or keep in force an insurance on the health of self, spouse, and dependant children Maximum deduction of Rs. 25,000 is allowed. Further deduction of up to Rs 25,000 is allowable to effect or to keep in force insurance on the health of parents of the assessee.

In case the assessee or the parent of the assessee is a senior citizen, i.e above 60 years of age, then the deduction amount would be Rs. 50,000 (instead of Rs. 25,000) [In layman's words, the assessee would be eligible for a deduction of Rs.75,000, (a. Rs 25,000 for self, spouse or dependent children, Rs. 50,000 for senior citizen parent or b. Rs 50,000 for senior citizen assessee and Rs. 25,000 for senior citizen parent.) One can't claim Rs 50,000 for both self and parent.

Preventive health check-up  

Section 80D provides that deduction to the extent of Rs. 5,000 (any mode of payment, including cash) shall be allowed in respect to the payment made on account of preventive health check-ups of self, spouse, dependent children, or parents made during the previous year. However, the said deduction of Rs. 5,000 is within the overall limit of Rs. 25,000 or Rs. 50,000. 

Deduction for medical expenditure incurred on senior citizens : As a welfare measure towards the Senior Citizens i.e., a person of the age of 60 years or more and resident in India, who are unable to get health insurance coverage, a deduction of upto Rs. 50,000 would be allowed in respect of any payment made on account of medical expenditure in respect of such person(s), if no payment has been made to keep in force an insurance on the health of such person(s). For claiming such deduction the mode of payment of should be other than cash.

In case one of the parents is a senior citizen who is covered under mediclaim policy and another is also a senior citizen but not covered under mediclaim policy, the aggregate of deduction, in respect of payment of medical insurance premium and medical expenditure incurred, cannot exceed Rs. 50,000.

Section 80DD: Deduction in Respect of Maintenance Including Medical Treatment of Dependent Disabled

Section 80DD provides deduction to an assessee, who incurred expenditure for

i)  The medical treatment (including nursing), training and rehabilitation of a dependant, being a person with a disability, or 

ii) Paid or deposited under a scheme framed on this behalf by the Life Insurance Corporation or any other insurer or the Administrator or the Specified Company as referred to in section 2(h) of the Unit Trust of India Act, 2002, for the maintenance of a dependant, being a person with a disability. 

The benefit of deduction under this section is also available to assessees incurring expenditure on maintenance including medical treatment of persons suffering from autism, cerebral palsy and multiple disabilities.

Amount of deduction 

The quantum of deduction is Rs. 75,000 and in case of severe disability (i.e. person with 80% or more disability) the deduction shall be Rs. 125,000.

Conditions

For claiming the deduction, the assessee shall have to furnish a copy of the certificate issued by the medical authority under the Persons with Disability Act, 1995 along with the return of income under section 139. 

Section 80DDB: Deduction in Respect of Medical Treatment

This section provides deduction to an assessee who is resident in India, being an individual and Hindu undivided family incurred expenditure for the medical treatment of specified disease or ailment made in this behalf by the Board for himself or a dependant.

Amount of deduction  

The amount of deduction under this section shall be equal to the amount actually paid or Rs. 40,000 whichever is less, in respect of that previous year in which such amount was actually paid. In case the amount is paid in respect of a senior citizen, i.e., a resident individual of the age of 60 years or more at any time during the relevant previous year, then the deduction would be the amount actually paid or Rs. 1,00,000 whichever is less.

The deduction under this section shall be reduced by the amount received, if any, under insurance from an insurer, or reimbursed by an employer, for the medical treatment of the assessee or the dependant. 

Conditions

To claim deduction under section 80DDB, it is mandatory for the assessee to provide a proof of the need for treatment and a proof that the treatment has been actually undertaken. Therefore, it is compulsory to obtain a prescription for such treatments from a qualified doctor.

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 :

• Neurological Diseases as identified by a specialist ,where the level of disability has been certified to be of 40% and above and covers Dementia, Dystonia Musculorum Deformans, Chorea, Motor Neuron Disease, Ataxia, Aphasia, Parkinson’s Disease and Hemiballismus.
• Malignant Cancer
• AIDS- Acquired Immuno-Deficiency Syndrome
• Chronic Renal failure
• Hematological disorders like Hemophilia or Thalassaemia.

Thus, the section intents to cover medical treatment for major illnesses and diseases and would not cover medical expenses which are more common in nature like a cataract or a C-section.

Section 80U: Tax Deduction for the Disabled Persons

Section 80U of the income tax is a deduction for the disabled individual. This section provides a flat deduction to the disabled person based on the severity of the disability, irrespective of the amount of expenditure.

Disability has been defined as one of the following:

• Blindness
• Low vision
• Leprosy-cured
• Hearing impairment
• Locomotor disability
• Mental retardation
• Mental illness

Amount of deduction 

The deduction amount depends on the severity of the disability. So, tax-payers with less than 80% but more than 40% disability get a deduction of Rs.75,000, and tax-payers with severe disabilities who are 80% or more get a deduction of Rs. 1,25,000. The deduction is a fixed amount that is allowed as a deduction from the taxable income, irrespective of the expenditure.

Conditions

• Tax-payers should be resident individuals.
• He should be suffering from at least 40% disability.
• The disability should also be certified by recognized medical authorities

Difference between Section 80U and Section 80DD : Section 80DD provides tax deductions to the family members and the kin of the taxpayer with a disability, whereas Section 80U provides deductions to the individual taxpayer with a disability himself.

Note :  if an individual opts for the New Tax Regime, the deduction under Section 80D/ 80DD/80DDB /80U will not be claimable.