The likelihood of illness and medical costs rises as people’s age increases. However, a taxpayer can reduce his Income-tax liability by claiming a deduction of medical expenses incurred towards senior citizen parents.

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On Treatment Of Specific Diseases 

“If an individual or Hindu Undivided Family (HUF) incurs expenses on the medical treatment of specific diseases or ailments for senior citizen parents, he can claim a deduction of up to Rs 1 lakh under Section 80DDB,” says Rahul Singh, senior manager, Taxmann, tax and corporate advisor.

The qualifying diseases or ailments under Section 80DDB include:

1) Neurological diseases with a certified disability level of 40 per cent or more:

– Dementia

– Dystonia Musculorum Deformans

– Motor Neuron Disease

– Ataxia

– Chorea

– Hemiballismus

– Aphasia

– Parkinson’s Disease

2) Malignant Cancers

3) Full-Blown Acquired Immuno-Deficiency Syndrome (AIDS)

4) Chronic Renal Failure

5) Hematological disorders, including:

– Hemophilia

– Thalassemia

It’s important to note that if the limit under Section 80DDB is exhausted, any remaining medical expenses can be claimed under Section 80D, subject to the maximum threshold of Rs 50,000.

“Separately for parents who qualify as senior citizens but do not have medical insurance, a deduction up to Rs 50,000 is permitted for medical expenses incurred,” says Aarti Raote, Partner, Deloitte India.

So, Singh says it is important to note that if the limit under Section 80DDB is exhausted, any remaining medical expenses can be claimed under Section 80D, subject to the maximum threshold of Rs 50,000.

To claim deductions, original medical bills and receipts are required.

On Health Insurance Premiums 

Section 80D permits taxpayers to claim a deduction for medical insurance payments made for themselves, their spouses, dependent children, and aged parents. “A deduction of up to Rs 50,000 can be claimed for health insurance of parents who are senior citizens. One must remember that this deduction is available only if the taxpayer opts for the regular tax regime,” says Raote.

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Deduction For Disability 

Under Section 80DD, one can get a deduction for caring for disabled parents. For disability of up to 40 per cent, a deduction of Rs 75,000 is allowed. When the disability is up to 80 per cent, a deduction of Rs 1.25 lakh is allowed. To claim such deductions, you need to submit a disability certificate issued by a specified medical authority.