I am 48 and my company provides me a group health insurance policy that covers my parents. I suffered a slipped disc last year and have to undergo regular physiotherapy. Can I claim tax benefit on medical expenses in the current financial year? My father is 80-plus and has Parkinson’s disease. In December 2019, he fell and broke his hip which was operated and replaced. The doctor advised regular dressing of the wound and physiotherapy. We have also kept an attendant for him. My mother is 75-plus. She is under treatment for nerve-related ailments. Both my parents are dependant on me. Can I claim the medical expenses on my parents?
— Subir Basu
We understand that you and your parents are covered under your employer’s group insurance plan, the premium for which is paid by your employer. No amount towards such premium paid is recovered from your salary and no separate deduction is being claimed by you under Section 80D of the Income-tax Act towards such premium.
The expenditure incurred by you towards preventive health check-up for yourself, would be available as a deduction under Section 80D to an annual limit of ₹5,000. This would be within the combined annual limit of ₹25,000 available to you towards premium paid for self and family on any health insurance policy, including top-up covers, if any. In case you pay a part of the premium under the group cover, the same will be a part of this ₹25,000 limit. However, no separate deduction towards other medical expenses are available to you.
As per Section 80D, a deduction is available towards the amount paid on account of medical expenditure incurred on any parent (who are senior citizens), to the extent of ₹50,000 per annum. However, as your parents are covered by your employer’s group insurance plan, a deduction for medical expenditure incurred for them may not be available under Section 80D.
A deduction is also available under Section 80DDB towards expenses incurred on the treatment of specified ailments (including Parkinson’s disease and specified neurological diseases), for a parent, wholly or mainly dependant on the taxpayer.
If the parent is aged 60 years or more, he or she would qualify as a senior citizen, and the taxpayer can claim a tax deduction of the actual expenditure incurred on the medical treatment, subject to a cap of ₹1 lakh per annum and other prescribed conditions. To claim this deduction, you will need to obtain the prescription for such medical treatment from the relevant medical authority.
Also, the deduction under this section shall be reduced by the amount received, if any, under an insurance from an insurer, or reimbursed by an employer, for the medical treatment of the parent. It may, however, be noted that the said deduction specifies only expenditure towards medical treatment and does not specifically include nursing or similar expenses.
Accordingly, you can explore the deduction towards expenses on medical treatment of your father or mother under Section 80DDB, subject to the prescribed conditions.
However, deduction towards expenses paid to a person who helps in nursing your father at home may not qualify for deduction under Section 80DDB.
A deduction is also available under section 80DD, to a resident taxpayer, if he has incurred any expenditure for the medical treatment (including nursing), training and rehabilitation of a dependant parent, with disability or severe disability, subject to specified conditions. Deduction of ₹75,000 per annum and ₹1.25 lakh per annum is available towards disability and severe disability, respectively. Disability is, however, defined in the Act to cover specific ailments only. Accordingly, in case Parkinson’s disease or your mother’s nerve ailments qualify as a disability or severe disability (consult a medical practitioner for that), you may explore this deduction. In order to claim the said deduction, a certificate in Form no. 10-IA is required to be obtained from the prescribed medical professional mentioning that the person suffers with the specified disability or severe disability.
Parizad Sirwalla is partner and head, global mobility services, tax, KPMG in India. Queries and views at email@example.com