Section 128 · Deductions
Section 128 of the Income-tax Act, 2025 — Deduction for Medical Treatment of Specified Diseases (Old Section 80DDB)
By CA Rajat Agrawal
Updated 04 Jul 2026
Chapter VIII
📜 What the law says — Section 128, Income-tax Act 2025
128. (1) An assessee who is resident in India, shall be allowed a deduction of the
amount actually paid during the tax year or a sum of ` 40000, whichever is
less, from income chargeable to tax of that tax year, for the medical treatment of
such disease or ailment as may be prescribed—
(a) for himself or a dependant, in case the assessee is an individual; or
(b) for any member of a Hindu undivided family, in case the assessee is a
Hindu undivided family.
(2) A deduction shall be allowed under this section only if the assessee obtains the
prescription for the medical treatment from a neurologist, oncologist, urologist,
haematologist, immunologist, or any other specialist, as may be prescribed.
(3) The deduction under this section shall be reduced by any amount received un-
der an insurance from an insurer, or reimbursed by an employer, for the medical
treatment of the person as referred to in sub-section (1)(a) or (b).
(4) If the amount actually paid is in respect of the assessee or his dependant or
any member of a Hindu undivided family of the assessee and who is senior citizen,
the amount of deduction as referred to in sub-section (1) shall be substituted with
“` 100000” for “` 40000”.
(5) For the purposes of this section,—
(a) “dependant” shall have the meaning as assigned to it in section 127(9);
(b) “insurer” shall have the meaning assigned to it in section 2(9) of the
Insurance Act, 1938 (4 of 1938).
Deduction in respect of interest on loan taken for higher education.
In plain language
What Section 128 is all about
Serious illnesses like cancer, kidney failure or neurological disorders can drain a family's savings within months. Section 128 of the Income-tax Act, 2025 gives partial relief by letting you deduct part of what you actually spend on treating certain notified (specified) diseases — either for yourself or for a dependant. This section is the direct successor to the well-known Section 80DDB of the Income-tax Act, 1961, and it becomes effective from 1 April 2026 (Tax Year 2026-27). The concept, limits and conditions have been carried forward almost unchanged; only the numbering and drafting language are new.
Who can claim it
- Only residents of India can claim this deduction. Non-residents (NRIs) are not eligible, even if they pay for treatment in India.
- Individuals can claim for medical treatment of themselves or a dependant.
- Hindu Undivided Families (HUFs) can claim for treatment of any member of the HUF.
- Companies, firms, LLPs and other entities cannot claim this deduction.
A "dependant" here takes the meaning given in the general definition (aligned with Section 127) — for an individual it means the spouse, children, parents, brothers or sisters who are wholly or mainly dependent on the taxpayer; for an HUF it means any member of the family.
How much you can deduct
- Normal case: deduction is the amount actually paid during the tax year or ₹40,000, whichever is lower.
- Senior citizen patient: if the person being treated is a senior citizen (age 60 years or more, resident in India), the ceiling rises to ₹1,00,000.
Note that the enhanced ₹1 lakh limit depends on the age of the patient (the person treated), not necessarily the age of the person paying the bill. So if you (aged 45) pay for your 68-year-old mother's cancer treatment, you can claim up to ₹1 lakh.
The specialist prescription condition
You cannot simply produce hospital bills. The deduction is allowed only if you obtain a prescription for the treatment from a specialist doctor. Depending on the disease, this must come from a neurologist, oncologist, urologist, haematologist, immunologist, or any other prescribed specialist working in a Government or recognised hospital. This prescription is the key supporting document — keep it safely, as the Department can ask for it.
Reduce your claim by any reimbursement
This is the single most-missed rule. Your deduction must be reduced by any amount you receive from an insurer or that is reimbursed by your employer for the same treatment. The deduction is meant for genuine out-of-pocket costs only — you cannot claim for money you have already got back.
How it interacts with other sections
- Section 128 is separate from health insurance premium relief (old 80D) and from the disability deductions (old 80DD / 80U). You can potentially claim more than one if the conditions of each are independently met.
- These "Chapter VIII / 80-series" deductions are generally available under the old tax regime. If you opt for the concessional new regime, most such deductions are not available — check your regime before relying on Section 128.
Practical implications
- The deduction is a flat capped amount, not a percentage — even a ₹5 lakh cancer bill gets you at most ₹40,000 (or ₹1 lakh for a senior).
- You claim it while filing your return; Form 10-I is no longer required, but a valid specialist prescription is mandatory.
- Always net off insurance/employer reimbursement before entering the figure, or you risk a mismatch notice.
💡 Example
Example 1 — Non-senior patient with insurance: Ramesh (age 42, resident) spends ₹90,000 on chemotherapy for himself, prescribed by an oncologist. His health insurer reimburses ₹30,000. His net out-of-pocket cost is ₹90,000 − ₹30,000 = ₹60,000. Since he is below 60, his cap is ₹40,000. He can claim the lower of ₹60,000 and ₹40,000 = ₹40,000 under Section 128.
Example 2 — Senior citizen dependant: Priya (age 38) pays ₹1,50,000 for her father's (age 70) dialysis for chronic kidney failure, prescribed by a nephrologist/urologist. No insurance or employer reimbursement is received. Because the patient is a senior citizen, the cap is ₹1,00,000. She can claim the lower of ₹1,50,000 and ₹1,00,000 = ₹1,00,000. If she were in the 30% slab, this saves roughly ₹31,200 in tax (including cess).
A short story: When Anjali's mother was diagnosed with Parkinson's disease, the family was overwhelmed by the monthly costs. A friend mentioned Section 128. Anjali got a proper prescription from the treating neurologist, kept every bill, and subtracted the ₹12,000 her employer had reimbursed. At filing time she claimed ₹1,00,000 (her mother being a senior citizen). It did not cover everything — but the tax saved paid for two months of medicines, and that mattered.
| Particulars | Normal (patient below 60) | Senior citizen patient (60+) |
|---|
| Maximum deduction | ₹40,000 | ₹1,00,000 |
| Basis of deduction | Amount actually paid OR the cap above, whichever is lower |
| Who can claim | Resident Individual (self/dependant) or Resident HUF (any member) |
| Key condition | Prescription from a specialist (neurologist, oncologist, urologist, haematologist, immunologist, or as prescribed) |
| Reduce claim by | Any insurance payout + any employer reimbursement for the same treatment |
| Tax regime | Generally available under the old regime only |
| Old law equivalent | Section 80DDB of the Income-tax Act, 1961 |
Related sections
Section 127 — Deduction for maintenance/medical treatment of a dependant with disability (old 80DD) Section 126 — Deduction for health insurance premium / preventive check-up (old 80D) Section 154 — Deduction for a person with disability (old 80U) Section 2(100) — Definition of senior citizen (60 years or more) Section 123 — Deduction for life insurance, PF, tuition fees etc. (old 80C)
Frequently asked questions
Which diseases are covered under Section 128?
The specified diseases are those notified under the rules (carried over from Rule 11DD), broadly covering neurological disorders like Parkinson's and dementia, malignant cancers, full-blown AIDS, chronic renal (kidney) failure, and certain blood disorders like haemophilia and thalassaemia. A specialist must certify the specific disease.
Is the deduction ₹40,000 or ₹1,00,000?
It is up to ₹40,000 if the patient is below 60, and up to ₹1,00,000 if the patient is a senior citizen (60 years or older). In both cases you can claim only the lower of the cap and the amount actually paid.
Can an NRI claim Section 128?
No. The deduction is available only to a person who is resident in India for that tax year. Non-residents cannot claim it even if the treatment happens in India.
Do I still need to file Form 10-I?
No, the earlier Form 10-I is no longer required. However, you must obtain and retain a valid prescription from the relevant specialist doctor, as it is the essential supporting document.
My insurer reimbursed part of the bill. Can I still claim?
Yes, but you must first reduce your claim by the insurance amount and any employer reimbursement. Only the net out-of-pocket cost (up to the cap) is deductible.
Can I claim Section 128 under the new tax regime?
Generally no. Like most Chapter VIII deductions, Section 128 is available under the old tax regime. If you opt for the concessional new regime, you usually forgo this benefit, so compare both regimes before deciding.
Whose age decides the ₹1 lakh limit — mine or the patient's?
The patient's age decides it. If the person being treated is 60 or above, the ₹1,00,000 limit applies, even if you (the person paying) are younger.
C
CA Rajat Agrawal
Chartered Accountant, EaseValue · Reviewed 04 Jul 2026
This explainer is prepared and reviewed by EaseValue's tax team, based on the text of the Income-tax Act, 2025 (as amended by the Finance Act, 2026).
Disclaimer: This page explains the law in general terms for education and is not professional advice. The Income-tax Act, 2025 takes effect from 1 April 2026; provisions, thresholds and interpretations may change. Please confirm your specific position with our team before acting.
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