Almost all the sectors of the economy are getting affected by the presence of AI, up to a large extent. The healthcare sector is also affected by the use of AI up to a large extent. Treatment of various complex health problems have become easier with the help of AI systems. A positive impact of AI is also seen in the healthcare sector, especially in the decision-making practices because of the increasing use of AI in guiding the process. The data related to the heath of various patients can now be analysed with greater degree of accuracy and depth with optimum utilization of AI. Having thorough knowledge of AI is very vital in order to ensure meaningful use of AI in the healthcare sector. The content of this chapter talks about the ethics that should be followed for the purpose of good quality of AI decision-making specially, in the formulation of treatment algorithms and diagnosis. The areas of algorithmic prejudices, consent of patient while using health data, legal liability that can be faced by parties involved in unethical use of AI in the healthcare sector are discussed in detail under this chapter. It also contains some suggestions regarding how ethical use of AI can be promoted especially in the healthcare sector.