Jaitley, 65, who has skipped office since Monday and even oath of office after being re-elected to the Rajya Sabha, was taken to AIIMS for diagonostic tests, sources close to the minister and doctors in AIIMS said.
On Thursday, Jaitely also tweeted regarding the same. He wrote - "I am being treated for kidney-related problems & certain infections that I have contracted. I am therefore currently working from controlled environment at home. The future course of my treatment would be determined by the doctors treating me"
The minister, who cancelled his scheduled visit to London to attend the 10th India-UK Economic and Financial Dialogue, confirmed his illness in a tweet.
A source at AIIMS said that the minister is likely to undergo kidney transplant and it is learnt that formalities for a donor kidney have been completed.
The minister did not elaborate on the ailment, but said he is "currently working from controlled environment at home. The future course of my treatment would be determined by the doctors treating me".
Depending on doctors' advice, he may be admitted to the Cardio-Neuro Tower at the All India Institute of Medical Sciences (AIIMS). The centre is housed in a separate building and is equipped with state-of-the-art equipment.
He is likely to be operated by nephrologist Dr Sandeep Guleria from Apollo hospital, also brother of AIIMS director Randeep Guleria, who is a family friend of Jaitley.
The minister, however, has not yet been hospitalised but has been advised to avoid going out in public for fear of catching infection.
Sources said Jaitley's present condition may be a fallout of the bariatric surgery he had undergone soon after the BJP government came to power at the Centre in 2014.
He underwent the surgery to treat weight gain that he suffered because of a long-standing diabetic condition.
That surgery was first performed at Max Hospital, but he then had to be shifted to AIIMS because of complications.
Though he has not been attending office since Monday, he is clearing files from his residence, they said.
The minister, who suffers from chronic diabetes, had heart surgery several years ago. He is a key member of the Prime Minister Narendra Modi's cabinet and presented his fifth and the present NDA government's final full budget on February 1.
The Budget was last month approved by the Lok Sabha without a discussion and it is not listed to be taken up in the Rajya Sabha before the current session of Parliament ends tomorrow, thereby not requiring his presence for a reply.