Mental health treatment in India? Claim these tax benefits now
What's the story
Mental health awareness in India has thankfully increased, prompting more individuals to seek help. However, the financial burden of therapy and medication can be significant.
Fortunately, the Income Tax Act of India provides tax benefits to alleviate this financial burden.
This article explores the sections of the act that offer relief for those undergoing mental health treatments.
Health insurance
Deductions under Section 80D
Individuals can claim deductions under Section 80D of the Income Tax Act for the premiums paid for health insurance policies that cover psychiatric treatments.
There is a cap of ₹25,000 on the deductions that can be claimed by individuals. The limit increases to ₹50,000 for senior citizens.
This deduction extends to policies that specifically cover hospitalization expenses arising from mental illnesses.
Medical treatment expenses
Exemptions under Section 80DDB
For individuals who do not have a health insurance policy with mental health coverage, Section 80DDB provides relief. It permits deductions for expenses incurred on medical treatment of specified diseases or ailments prescribed by the government (which includes neurological diseases).
The deduction limit is up to ₹40,000 for individuals below 60 years and up to ₹1 lakh for senior citizens.
Disability benefits
Deductions under Section 80U
Section 80U of the Income Tax Act provides significant tax benefits for individuals with disabilities, including mental health conditions.
Eligible taxpayers can claim a flat deduction of ₹75,000, irrespective of their actual expenses.
For those with severe disabilities (i.e., 80% disability or more), the deduction is even more substantial at ₹1.25 lakhs.
This provision is intended to alleviate the financial burden faced by individuals with disabilities.
Documentation
Claiming deductions: Documentation required
To avail deductions under Sections 80DDB and 80U, individuals must maintain a comprehensive record of documents.
This includes medical bills and certificates from qualified practitioners or hospitals, specifying the disability or illness.
For Section 80DDB claims, it is crucial to have a prescription from a specialist.
And, seeking advice from a tax expert can help guarantee adherence to rules and optimize benefits.