Section 128 of the Income Tax Act, 2025 provides a deduction for medical treatment of specified chronic diseases and ailments. The deduction is available to resident individuals, Hindu undivided families, and their dependants or members. Rule 62 of the Income Tax Rules, 2026 specifies the specialist qualifications required for issuing prescriptions for different diseases. This checklist provides a comprehensive reference for taxpayers and practitioners.
Overview of the Deduction
Deduction Amount: Rs. 40,000 or actual amount paid, whichever is less (Rs. 100,000 for senior citizens)
Eligible Assessees:
- Resident individuals (for themselves or dependants)
- Resident Hindu undivided families (for any member)
Conditions:
- Prescription from a qualified specialist
- Treatment during the tax year
- No reimbursement from insurance or employer
Disease-Specific Requirements
Neurological Diseases
Eligible Conditions:
| Disease | ICD Code Reference | Specialist Required | Additional Requirement |
|---|---|---|---|
| Dementia | F00-F03 | Neurologist (D.M. in Neurology) | Disability ≥ 40% |
| Dystonia Musculorum Deformans | G24.1 | Neurologist (D.M. in Neurology) | Disability ≥ 40% |
| Motor Neuron Disease | G12.2 | Neurologist (D.M. in Neurology) | Disability ≥ 40% |
| Ataxia | G11 | Neurologist (D.M. in Neurology) | Disability ≥ 40% |
| Chorea | G25.5 | Neurologist (D.M. in Neurology) | Disability ≥ 40% |
| Hemiballismus | G25.4 | Neurologist (D.M. in Neurology) | Disability ≥ 40% |
| Aphasia | R47.0 | Neurologist (D.M. in Neurology) | Disability ≥ 40% |
| Parkinsons Disease | G20 | Neurologist (D.M. in Neurology) | Disability ≥ 40% |
Specialist Qualification: Neurologist with D.M. in Neurology Equivalent Qualification: Any equivalent degree recognised by the Medical Council of India
Malignant Cancers
Eligible Conditions: All malignant cancers (ICD-10: C00-C97)
Specialist Qualification: Oncologist with D.M. in Oncology Equivalent Qualification: Any equivalent degree recognised by the Medical Council of India
Full Blown Acquired Immuno Deficiency Syndrome (AIDS)
Eligible Conditions: Full Blown AIDS (ICD-10: B20-B24)
Specialist Qualification: Any specialist with postgraduate degree in General or Internal Medicine Equivalent Qualification: Any equivalent degree recognised by the Medical Council of India
Chronic Renal Failure
Eligible Conditions: Chronic renal failure (ICD-10: N18)
Specialist Qualification: Nephrologist with D.M. in Nephrology OR Urologist with M.Ch. in Urology Equivalent Qualification: Any equivalent degree recognised by the Medical Council of India
Hematological Disorders
Eligible Conditions:
| Disease | ICD Code Reference | Specialist Required |
|---|---|---|
| Hemophilia | D66-D68 | Specialist with D.M. in Hematology |
| Thalassaemia | D56 | Specialist with D.M. in Hematology |
Specialist Qualification: Specialist with D.M. in Hematology Equivalent Qualification: Any equivalent degree recognised by the Medical Council of India
Government Hospital Provisions
In cases where a patient is receiving treatment at a Government hospital, the prescription may be issued by a full-time specialist with a postgraduate degree in General or Internal Medicine, or any equivalent degree recognised by the Medical Council of India.
This applies only where the patient is receiving treatment at a Government hospital.
Prescription Format Requirements
The prescription must be issued in the following format:
| Field | Requirement |
|---|---|
| Name of the patient | Full name |
| Age of the patient | As on date of prescription |
| Description of Disease/Ailment | Specific diagnosis |
| Certification by | Specialist with prescribed qualification |
| Specialist's Signature | Original signature |
| Name | Full name of specialist |
| Qualification | As specified for the disease |
| Address | Practice address |
| Registration Number | Medical Council registration number |
| Hospital Details | If working in a Government hospital |
Documentation Checklist
For Taxpayer
- Valid prescription from qualified specialist
- Medical bills and receipts
- Proof of payment (bank statements, receipts)
- Insurance reimbursement details (if applicable)
- Employer reimbursement details (if applicable)
- Age proof (for senior citizen enhanced deduction)
For Dependant
- Proof of relationship (for dependant deduction)
- Prescription in the name of the dependant
- Medical bills in the name of the dependant
Common Compliance Issues
Incorrect Specialist: The specialist must have the prescribed qualification for the specific disease.
No Disability Certification: For neurological diseases, disability level must be certified at 40% or above.
Expired Prescription: The prescription must be issued during the tax year.
Missing Documentation: All bills and receipts must be maintained.
Insurance Reimbursement: Deduction must be reduced by insurance reimbursement.
Expert Legal Guidance
Understanding the chronic disease deduction requirements is essential for taxpayers claiming this deduction. Anuj Desai & Associates provides expert advisory services on Direct Tax Code compliance, helping taxpayers obtain proper prescriptions and ensure compliance with all requirements.