The additional medical expenses tax credit, in Section 6B of the Income Tax Act, gives relief for medical costs beyond the basic scheme membership covered by the Section 6A credit. It covers out-of-pocket expenses and contributions that exceed set limits.
What it means
Where someone has high medical costs - either contributions well above the norm or significant expenses the scheme did not pay - Section 6B converts a portion of the excess into a tax credit. The calculation depends on age and disability status and only kicks in above a threshold tied to taxable income, so it is mostly a year-end assessment item rather than a routine monthly one.
Where it fits in
Because it depends on annual income and total expenses, the Section 6B credit is usually claimed on assessment rather than applied each pay period. Payroll applies the Section 6A credit monthly; Section 6B typically settles when the individual's return is assessed.
Key rules
- Relief for qualifying out-of-pocket costs and excess contributions.
- Applies only above an income-linked threshold.
- The rate and threshold depend on age and disability status.
- Generally claimed on assessment, not in monthly PAYE.
