Direct answer: For tax year 2026–27, section 128 allows an eligible resident individual or HUF a deduction for actual payment for prescribed medical treatment. First restrict eligible payment to ₹40,000, or ₹1,00,000 for a qualifying senior-citizen patient; then subtract relevant insurer receipts and employer reimbursements, with no negative deduction. A large hospital bill, an insurance premium or an ordinary medical prescription alone does not establish this claim.
Checked on 23 October 2026 against section 128, the Income-tax Act, 2025 as amended by Finance Act, 2026 and Rule 62 of the notified Income-tax Rules, 2026. The corresponding legacy provision was section 80DDB. For tax year 2026–27, use the current Act and Rule 62 rather than copying an old form reference or a prior-year return instruction.
Start with the patient, payer and tax regime
An individual may claim for their own qualifying treatment or that of a specified dependant. For an HUF, section 128(1)(b) refers to treatment of any member; establish membership and the HUF’s actual payment. For the individual’s dependant claim, section 128 imports the definition in section 127(9): for an individual, the specified relationships are spouse, children, parents, brothers and sisters, with support and maintenance wholly or mainly dependent on the individual. Do not replace section 128(1)(b)’s reference to an HUF member with the individual’s family-relationship test. A relationship label without the dependency facts is insufficient.
The higher limit depends on the patient being a senior citizen, not merely on the payer’s age. Section 2(100) defines a senior citizen as an individual resident in India aged sixty or more at any time in the relevant tax year. Document both age and residence. The ordinary and higher amounts are ceilings on actual eligible payment, not automatic fixed allowances or separate limits for every hospital invoice.
Under section 202, the default new regime excludes this Chapter VIII deduction. Confirm a valid applicable option out of that regime before entering the claim. All calculation examples below assume sufficient eligible income and satisfied residence, patient, disease and prescription conditions unless expressly stated otherwise. They determine the deduction, not final tax, cess, rebate or a refund.
Match the disease to Rule 62 and the prescribing specialist
Rule 62’s table covers specified neurological diseases subject to the stated disability-level condition, malignant cancers, full-blown AIDS, chronic renal failure, and the specified haematological disorders haemophilia and thalassaemia. The neurological category is not every neurological complaint: it names particular diseases and requires a certified disability level of at least 40%. A preparer should match the actual diagnosis to the table rather than treating all long-term illnesses as eligible.
The rule also links disease categories to specialist qualifications. For example, chronic renal failure requires the stated qualified nephrologist or urologist; other categories have their own specialist requirements. It recognises specified equivalent qualifications and a separate government-hospital route involving a full-time specialist. Use the actual table and sub-rules for the case. A blanket statement that treatment must always occur in a government hospital is inaccurate.
The prescription format in Rule 62 asks for the patient’s name and age, disease or ailment, and the specialist’s signature, name, qualification, address and registration number, with government-hospital details where relevant. Do not substitute a disability certificate for a required treatment prescription or demand Form 30 merely because it appears nearby in the Rules: that form addresses a different disability-certificate framework.
Apply the ceiling before subtracting reimbursements
Let P be the eligible amount actually paid during the tax year and L the applicable patient-based ceiling. The starting deduction is min(P, L). Section 128(3) then reduces that deduction by relevant insurer receipts and employer reimbursements for the treatment. The working result is max(0, min(P, L) − reimbursements). Reversing the order can overstate the claim when payment exceeds the ceiling.
| Stage | Working | Evidence |
|---|---|---|
| Eligible payment | Actual qualifying treatment payment in the tax year | Paid invoices and payment records |
| Patient-based cap | Lesser of payment and the applicable ceiling | Age, residence and patient eligibility |
| Reimbursement reduction | Subtract insurer receipts and employer reimbursements | Settlement letters and payroll records |
Keep unpaid invoices separate from payments. Reconcile insurer and employer settlements for the same treatment so that a recovery is not missed or deducted twice. Where a settlement is received in another year or the facts involve disputed reimbursement, establish the correct year-specific return treatment rather than silently ignoring it. Do not claim the same underlying payment twice under overlapping medical provisions; identify the legal basis for each distinct amount.
Worked illustrations
These illustrations use fictional facts and expressly stated assumptions. Amounts are Indian rupees unless a different currency or unit is specified. They are independent examples, not findings about any actual client.
Illustrative example 1: Actual payment below the ordinary ceiling
A resident individual aged 45 pays ₹32,000 for their own qualifying prescribed treatment, with no reimbursement. The lesser of ₹32,000 and ₹40,000 is ₹32,000. Allowable deduction: ₹32,000, not an automatic ₹40,000.
Illustrative example 2: Capping before an insurance recovery
A qualifying patient aged 48 pays ₹95,000 and receives ₹25,000 from the insurer for that treatment. First cap ₹95,000 at ₹40,000; then subtract ₹25,000. Deduction: ₹15,000. Taking net expenditure of ₹70,000 and then capping it at ₹40,000 would overstate the deduction by ₹25,000.
Illustrative example 3: The senior-patient ceiling
A qualifying resident patient aged 67 pays ₹1,80,000 for their own treatment and receives ₹30,000 from the insurer. Starting deduction is ₹1,00,000; after the reimbursement it is ₹70,000. The unreimbursed ₹1,50,000 is not itself the deductible amount.
Illustrative example 4: Reimbursement exhausts the deduction
A non-senior qualifying patient pays ₹70,000 and receives ₹50,000 of relevant insurance reimbursement. The capped amount is ₹40,000 and reimbursement exceeds it by ₹10,000. Deduction is zero, not minus ₹10,000 and not ₹20,000.
Illustrative example 5: Insurer and employer both reimburse
A qualifying senior patient pays ₹1,50,000. Relevant insurer reimbursement is ₹20,000 and the employer reimburses a separate ₹15,000 of the same treatment cost. Total reimbursement is ₹35,000. Deduction: ₹1,00,000 − ₹35,000 = ₹65,000. Neither receipt may be omitted.
Illustrative example 6: A bill is not the amount actually paid
A non-senior patient has an eligible treatment invoice of ₹1,00,000 but pays only ₹28,000 during the tax year; ₹72,000 remains unpaid. With no reimbursement, the current-year deduction is ₹28,000. This example assumes no other payment or prior-year allocation and makes no advance claim for the unpaid balance.
Illustrative example 7: The regime can override a favourable computation
A qualifying senior patient pays ₹1,20,000 with no reimbursement, producing a notional section 128 amount of ₹1,00,000. If the taxpayer remains in section 202’s default regime, the section 128 deduction is zero. A valid prescription does not remove that regime restriction.
Ten-step verification table
| Step | Verification | Evidence to retain |
|---|---|---|
| 1 | Identify the tax year and current provision | 2026–27 computation using section 128 |
| 2 | Confirm the taxpayer’s residence and permitted regime | Residence facts and valid regime option |
| 3 | Establish eligible patient and dependency where needed | Relationship, support and HUF records |
| 4 | Verify the patient-based senior-citizen test | Age and Indian-residence evidence |
| 5 | Match the actual disease to Rule 62 | Diagnosis and applicable table entry |
| 6 | Verify prescription and specialist credentials | Required particulars and qualification route |
| 7 | Reconcile actual payments for the tax year | Paid invoices, bank records and unpaid balance |
| 8 | Compute the lesser-of-payment-and-ceiling amount | Independent cap calculation |
| 9 | Deduct relevant insurer and employer receipts | Settlement reconciliation without duplication |
| 10 | Reconcile the final deduction to the return | Nil floor, income limits and retained evidence |
Sixteen practitioner FAQs
1. Which provision applies for tax year 2026–27?
Use section 128 of the 2025 Act and Rule 62 of the 2026 Rules. Section 80DDB is the corresponding legacy label.
2. Can every resident claim ₹40,000 automatically?
No. Actual eligible payment, the prescribed disease, patient eligibility, prescription and regime conditions all matter.
3. Whose age determines the ₹1,00,000 limit?
The qualifying patient’s senior-citizen status determines it. The payer’s age alone does not increase the limit.
4. Is age sixty enough without checking residence?
No. The Act’s senior-citizen definition includes Indian residence as well as attainment of sixty during the relevant tax year.
5. Is a parent automatically a qualifying dependant?
Check the imported statutory definition and actual support facts. A specified relationship alone does not establish wholly or mainly dependent support and maintenance.
6. Can an HUF claim for a member?
Section 128 provides an HUF limb. Establish the membership, actual HUF payment and other conditions under section 128(1)(b). The individual’s specified-relative test should not be substituted for that HUF limb.
7. Does every chronic illness qualify?
No. Match the disease or ailment to Rule 62’s table; an illness being expensive or long term is not the statutory test.
8. Does the neurological category have a severity condition?
Yes. The rule specifies listed neurological diseases with certified disability of 40% or above. Do not apply that condition indiscriminately to other disease categories.
9. Must every patient use a government hospital?
No. Rule 62 specifies specialist qualifications and also a separate government-hospital route. Apply the actual qualification and prescription requirements.
10. Is Form 30 the treatment prescription?
No. Form 30 belongs to the specified disability-certificate framework. Rule 62 provides its own treatment-prescription particulars.
11. Should reimbursement be subtracted before applying the ceiling?
No. Section 128 first determines the capped deduction and then reduces it by relevant insurer receipts or employer reimbursement.
12. Can the calculation produce a negative deduction?
No. Use zero when relevant reimbursement exhausts the capped deduction; it is not a negative deduction carried elsewhere.
13. Does an unpaid invoice qualify as actual payment?
Not merely because it has been billed. Reconcile the amount actually paid in the tax year and separately track the unpaid balance.
14. Is a health-insurance premium the same claim?
No. Premium deductions have their own statutory framework. Section 128 addresses actual prescribed-treatment payments and reimbursement reductions.
15. Does the default new regime allow this deduction?
No. Verify a valid applicable option out of section 202’s default regime before claiming section 128.
16. What if reimbursement is received in another year?
Retain the treatment and settlement trail and determine the appropriate year-specific reporting or correction. Do not assume a delayed receipt may simply be ignored.
Working-paper organisation
Keep the source documents, calculation and final conclusion together for the same entity and period. If using assureTax or other assureOffice tools, use only confirmed available functions and retain this evidence with the output.
Conclusion
Validate the patient and prescription first. Then cap actual payment, subtract relevant reimbursements and reconcile the result with the taxpayer’s regime and return.