Medical Bills Tax Exemption For AY 2018-19: Rules & How to Claim With Automated Income Tax 100 employees Form 16 Part B for F.Y.2018-19

In recent years, the incidence of health issues and their treatment prices have accrued by leaps and bounds everywhere the globe. the most culprits for this embody dynamical food habits and poor manner selections. in step with associate analysis revealed by the world’s leading medical journal ‘Lancet’, Indians pay around seventy-eight of their medical expenses out of their own pocket. The paper points out that the bulk of this treatment expenditure (approximately 74%) incurred in India is for patient treatment whereas solely twenty-sixth expenditure relates to inpatient procedures that need hospitalization of twenty-four hours or a lot of.

It additionally states that seventy-two of the overall out-of-pocket expenses related to buying of medicines each before and once medical procedures. so as to produce some relief to the society at giant and people especially from these escalating medical prices, some provisions are created within the Tax Act, 1961. These provisions facilitate in decreasing the tax burden by providing varied deductions and exemptions for payment of medical expenditures, insurance premiums, etc. These deductions and exemptions are careful as below :

Medical Allowance

Medical allowance may be a mounted quantity paid by some employers to their staff on a monthly basis. If medical allowance is received by the worker, such compensation can’t be claimed as a deduction from non-exempt financial gain. The medical allowance shall be totally non-exempt beneath the pinnacle ‘Income from alternative Sources’ in such cases.

Reimbursement of Medical bills by the leader

There area unit variety of deductions and exemptions allowed beneath the Tax Act. one among these exemptions relates to medical bills and connected expenses incurred throughout the fiscal year by a personal. These expenses embody those created for the treatment of self additionally as family members/dependents. compensation of medical expenses to salaried staff by their employers doesn’t return beneath the tax extent. the subsequent conditions got to be consummated so as to assert this exemption :

  • Medical expenses incurred on self, spouse, kids or fully dependent oldsters & siblings will solely be claimed for exemption.
  • These medical bills will relate to medicines bought from medical retailers or pharmacies or treatment of associate disorder done at any clinic, non-public hospital or public hospital.
  • These medical bills got to be submitted solely with the leader. No compensation will be claimed at the time of filing the tax come.
  • A tax exemption that may be claimed in the role of medical bills and transport allowances is capped at a typical deduction of office 40,000 each year.

From FY 2018-19, a typical deduction of office 4,000in role of travel, disbursal compensation, and alternative allowances has been planned for salaried staff and pensioners. to assert this normal deduction, there’s no got to submit medical bills to your leader.

A salaried worker either receives a hard and fast medical allowance or is allowed a compensation from the leader.

Download Automated Income Tax Form 16 Part B for the Financial Year 2018-19 & Ass Year 2019-20 [ This Excel Utility can prepare at a time 100 employees Form 16 Part B for F.Y.2018-19 ]

 Tax Deduction U/S 80D

A deduction of office 25,000 every year will be claimed for medical insurance finished self, better half and youngsters associated office 25000 for frog eyes (Whether dependent or not) you would like to urge a medical insurance done from any insurer and pay an annual premium to assert the premium quantity paid as tax exemption. just in case of an associate assessee being an adult, tax exemption allowed on medical insurance is up to office 50,000 each year for FY 2018-19.

Tax Deduction U/S 80DDB for Medical expenses

These days even medical consultations, easy tiny surgeries or minor medical treatments will burn a hole in your pocket. so as to cut back your tax burden by permitting the deduction of medical expenses to an explicit limit, the tax Act has created some key provisions during this context.

Deduction for medical expenses will be claimed u/s 80DDB for medical expenditure incurred just in case of self, spouse, children, oldsters or dependent siblings. This deduction will be claimed solely by a resident individual or a member of the HUF. solely associate assessee United Nations agency is associate Indian resident for the given fiscal year (for that deduction is being claimed) is eligible to assert this deduction.

Cap on Payouts

Actual expenses incurred on medical treatments and transport allowance will be claimed as a normal deduction subject to an associate higher limit of office forty,000. This deduction limit varies just in case of 1 age bracket to a different. this cover of office fifty,000 applies to people aged but sixty years. Whereas for senior voters of up to eighty years, actual medical expenses or office 75,000 shall be allowed as deduction. For super senior voters i.e. aged a lot of over eighty years, this limit has been mounted at office 1,00,000.

How to claim the benefit?

The only demand for claiming deduction beneath section 80DDA is to gift the certificate of sickness. this could be obtained from the specialist medic, whether or not active at a non-public or a public hospital, from whom the treatment is sought-after. The specialist ought to possess a degree within which he/she has specialised. The degree should be genuine by the Medical Council of India.

Deduction for medical expenses can’t be claimed if compensation for identical is completed by the insurer. however if the compensation done by the insurer is a smaller amount than the particular expenditure, tax write-off will be claimed for the balance quantity (maximum up to the deduction limit).

Diseases lined beneath section 80DDB

The deduction will be claimed for treatment of a good vary of diseases that include: medicine disorders like insanity, hemiballismus, ataxia, Parkinson’s sickness, motoneuron sickness, chorea, dystonia, musculorum deformans, and brain disease. Treatment of chronic conditions like malignant cancers, kidney failure and medicine disorders like haemophilia, Mediterranean anaemia and full-blown AIDS (Acquired immunological disorder Syndrome) may also be claimed for deduction beneath Section 80DDB.

Tax Deduction u/s 80D for Payment of insurance Premium

A deduction of Rs 20,000 will be made of your total annual financial gain to attain the non-exempt financial gain in the role of the insurance premium paid throughout a year. For senior voters, this limit has been raised to Rs 50,000. quantity paid as premium for Mediclaim policies purchased for self, spouse, oldsters and dependent kids alone will be claimed for tax deduction beneath section 80DD. For national over 80years getting on, the most deduction obtainable beneath this section is office 1,00,000.

Tax Deduction u/s 80DD for Expenses Incurred on Treatment of a Disabled Dependent

According to Section 80DD, expenditure incurred for treatment of a disabled dependent or for payment created for associate approved insurance theme meant for maintenance of a disabled dependent shall be eligible for tax-deduction.

If the dependent is affected by severe incapacity (i.e. incapacity of eightieth or more) the limit for tax write-off has been mounted at Rs 25,000 per fiscal year. This limit shall be restricted to Rs. 75,000 in alternative cases i.e. the lower degree of incapacity. an individual with incapacity shall be the one United Nations agency has suffered ‘not but four-hundredth disability’ as per the certification of a medical authority.

The disabilities eligible beneath this section includes handicap, mental disease, autism, brain disorder, multiple disabilities, visual disorder (or low vision), retardation, leprosy, etc. just in case of individual tax payees, dependents United Nations agency area unit lined embody better half, children, siblings and/or oldsters. just in case of HUF, any member of HUF will be treated as a dependent. A certificate of treatment from doctors of presidency hospitals is needed to be submitted in a very prescribed format to assert deduction as a disabled dependant beneath this section.

Payment to associate insurance theme is eligible for tax write-off providing the disabled dependent gets the quantity (whether within the style of rented or lump sum) once the tax payer’s death. A trust, dependent, or the other person will be appointive for receiving the payment on behalf of dependent in such cases.

Deduction u/s 80U for Persons with Disabilities

A disabled person suffering from four-hundredth or a lot of incapacities will claim deductions capped at office 75,000 annually beneath this section. just in case of severe incapacity, the deduction limit shall be accrued to the office a 25,000. A certificate from government-approved medical authority is needed to be outfitted for claiming deduction beneath this section. revaluation of incapacity is done on ending of the certificate. The disabilities eligible for deduction area unit same as beneath section 80DD of the Tax Act of 1961.

Medical bill compensation Rules

On Feb 1, Arun Jaitley planned a typical deduction of office 40,000 in the role of medical compensation and transport allowances for the taxpayers. beneath FY 2018-19, salaried people and pensioners needn’t ought to furnish any bills or documents to assert the quality deduction of office 40,000. As planned, there are no such rules to assert account compensation, taxpayers will straightaway claim it.

Medical Bill compensation kind

From FY 2018-19 salaried additionally as donee taxpayers don’t need to submit the medical bills to assert medical deductions. In some cases, corporations do demand for medical bills compensation kind that is therefore issued by the corporate wherever worker is functioning. account compensation format varies from company to company.

Amendments to Medical Allowance in Union Budget 2018

  • In order to produce a serious relief for the taxpayers, minister of finance, Arun Jaitley on Feb one, whereas presenting the budget 2018-19 planned a typical deduction of office 40,000 in the role of transport allowance and medical compensation.
  • Limit of tax write-off has been accrued to office 50,000 from office 30,000 for senior voters by FY 2018-19
  • The Budget 2018 has additionally provided flexibility for Super adults additionally as Senior national u/s 80DDB. The higher tax limit deduction has been accrued to office 1,00,000 for each the taxpayers.

Medical allowance for Pensioners

As per the change created through Finance Act 2018 in Section sixteen of the Tax Act, 1961 pensioners will claim deductions up to office 40,000 in a very style of normal deductions. CBDT clearly explicit the very fact that pension received by the payer from the previous leader shall be allowed deduction of office 40,000 for computing non-exempt financial gain. the normal deduction has been created obtainable from FY 2018-19 and can be applicable to the assessment year 2019-2020.


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