Handicapped or disabled Dependent: Section 80 DD

Meanwhile if you have a handicapped dependent and you incur expenditure on his or her medical treatment then you are eligible for tax deduction under section 80 DD of the Income Tax Act. The deduction allowed is Rs 50,000 / Rs 75,000 depending on the extent of the disability of your dependent. A deduction of Rs 50,000 is allowed if you have a disabled dependent whereas a deduction of Rs 75,000 is allowed if you are serving a dependent with severe disability. However this is a lump sum deduction and it does not depend on the amount that you spend on the disabled dependent.

Specific Ailment treatment: Section 80 DD B

At the same time, if a resident incurs expenditure on the medial treatment of his/ dependent's disease or an ailment specified by the board then he can claim deductions up to Rs 40,000 under section 80 DDB of the Income Tax Act. In case of senior citizens, the deduction has been extended to a maximum of Rs 60,000. In order to claim the deductions, the taxpayer must furnish a certificate in the prescribed form from a specialist working in a Government hospital.

Hence in today's rising cost of quality healthcare in India as well as the incidence of lifestyle diseases, health insurance has become an integral part of overall investment planning.