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Guide to Section 80DDB

  • Author :
  • TATA AIG Team
  • Published on :
  • 30/01/2024
  • 2 min read

Section 80DDB of the Income Tax Act in India stands as a significant provision aimed at providing financial relief to those burdened with the high costs of treating certain specified diseases.

With the objective of reducing the liability of medical expenses for taxpayers, this section offers a provision to claim deductions for expenses incurred in the treatment of various illnesses.

To have a better understanding of tax deduction u/s 80DDB, this blog covers more about its eligibility, 80DDB deduction limit, documentation, 80DDB exemption, process, etc. The acknowledgement of these factors will make it simple for individuals who are eligible and wish to take advantage of this tax benefit.

Deductions Under Section 80DDB of Income Tax Act

"Section 80DDB Deduction of Income Tax Act" is a provision in the Income Tax Act of India that allows taxpayers to claim deductions for medical expenses incurred for the treatment of specified diseases or ailments.

This section allows individuals and Hindu Undivided Families (HUFs) to claim a deduction on their income tax for these expenses.

Eligibility for Deduction Under Section 80DDB

Eligibility for deduction under Section 80DDB of the Income Tax Act in India is subject to certain conditions designed to provide financial relief to those incurring substantial medical expenses due to serious health conditions. The key eligibility criteria are as follows:

Residency Status: The taxpayer claiming the deduction must be a resident of India during the financial year for which the claim is made.

Patient's Relationship with the Taxpayer: The patient for whom the medical treatment is being undertaken should be either the taxpayer themselves or a specified relative.

In the case of individual taxpayers, this can include the spouse, children, parents, and siblings who are dependent on the taxpayer. For Hindu Undivided Families (HUFs), any member of the HUF can be the patient.

Specified Diseases or Ailments: The deduction is specifically for expenses related to the treatment of certain diseases or ailments. These are outlined in Rule 11D of the Income Tax Act.

Age of the Patient: The maximum amount of deduction allowed under Section 80DDB varies based on the age of the patient. Higher deductions are permitted for senior citizens.

Medical Certification: To claim the deduction, it is mandatory to obtain a medical certificate from a specialist working in a government hospital. The certificate must provide the specifics of the disease or ailment and the details of the treatment.

Note: If the taxpayer has received any reimbursement, such as those that come under medical insurance or an employer for the medical expenses, such reimbursed amount should be deducted from the total expenses incurred before claiming the deduction under Section 80DDB.

Amount of Deduction Under Section 80DDB

Age Group of the Patient Maximum Deduction Limit (₹) Additional Notes
Below 60 years 40000 Applicable to general taxpayers
60 to less than 80 years 1,00,000 Higher limit for senior citizens
80 years and above 1,00,000 Maximum limit for super senior citizens

Note that The above specified is the maximum deduction; the actual expenses incurred, if lesser than the limit, then it will be considered as the deduction amount.

List of Specified Diseases Covered Under Section 80DDB

Category Section 80DDB Diseases/Conditions Included
Neurological Diseases Dementia, Dystonia musculorum deformans, Motor Neuron Disease, Ataxia, Chorea, Hemiballismus, Aphasia, Parkinson's
Malignant Cancers All types of cancers
AIDS Acquired Immuno-Deficiency Syndrome
Chronic Renal Failure Kidney failure requiring regular dialysis
Haematological Disorders Haemophilia, Thalassaemia

Document Requirement For Claiming 80DDB Deduction

Medical Certificate: Obtain a certificate from a specialist doctor outlining the diagnosis of the specified disease or ailment. The doctor must be registered with the Medical Council of India or any State Medical Council.

Prescription for Treatment: A prescription detailing the treatment being undertaken is essential.

Proof of Age: In cases where the deduction amount varies based on the age of the patient (such as for senior citizens), proof of age is required. This could be in the form of a government-issued identity document like a passport, Aadhaar card, or voter ID.

Bills and Receipts: Keep all original medical bills and receipts related to the treatment. This includes hospital bills, pharmacy bills, and receipts for any medical equipment or aids purchased.

Proof of Payment: Documents that clearly demonstrate that payments were made towards medical treatment. These can include bank statements, credit/debit card statements, or acknowledged receipts.

PAN of the Patient: If the patient is a different person (like a dependent family member), then their Permanent Account Number (PAN) may be required.

Form 10-I: If applicable, a duly filled Form 10-I may be required as per the rules of the Income Tax Act.

Details of Reimbursement: If an insurer or employer has reimbursed any part of the medical expenses, evidence of such reimbursement is necessary.

Process to Claim 80DDB Deduction

Diagnosis and Treatment: Ensure that the medical treatment is for a disease or ailment specified under Section 80DDB.

Obtain a Medical Certificate: Get a certificate from a specialist doctor registered with the Medical Council of India or any State Medical Council. The certificate must detail the patient's diagnosis.

Collect Relevant Documents: Gather all necessary documents, including medical bills, prescriptions, proof of age (if applicable), and proof of payments made towards medical treatment.

Fill in Form 10-I (If Required): In some cases, you may need to fill out Form 10-I as per the Income Tax Act rules.

Include Deduction in Income Tax Return: While filing your income tax return, include the amount you are claiming under Section 80DDB. Ensure this is done in the relevant section of the tax return form.

Deduct Reimbursements: If you have received any reimbursements for medical expenses from an insurance company or employer, subtract this amount from the total medical expenditure before claiming the deduction.

Keep Documents Handy: Store all documents safely, as they may be required for verification by the Income Tax Department.

Submit the Return: Finally, submit your income tax return with the deduction claimed. This can be done online through the e-filing portal of the Income Tax Department.

Things to Know While Claiming Deduction Under Section 80DDB

  • The deduction is available only for actual expenses incurred for the treatment.

  • It cannot be claimed for any reimbursed amount or if covered under any insurance.

  • The treatment should be for the taxpayer or specified dependents, which includes spouses, children, parents, and siblings.

  • It is important to note that this deduction is distinct from the one under Section 80D, which is for health insurance premiums. Taxpayers can avail of both deductions if they meet the respective criteria.

Reimbursement/Adjustment Under Section 80DDB

If you receive any reimbursement from an insurer or employer for the medical expenses for diseases covered under section 80DDB of the Income Tax Act, that amount would be reduced from the deduction claimed under this section. The adjusted amount will then be considered for deduction.

Health Insurance With Tata AIG

Section 80DDB offers a deduction for expenses incurred in the treatment of certain specified diseases. However, despite this provision, the cost of treatment can still be substantial, especially for serious illnesses. This is where medical insurance becomes invaluable.

Getting health insurance is a critical aspect of financial planning, offering protection against high medical costs. Buying a medical insurance plan from a trusted insurance company like

Tata AIG ensures that with the benefits of health insurance, individuals can access necessary healthcare without the burden of overwhelming expenses.

Conclusion

Section 80DDB of the Income Tax Act in India serves as a compassionate provision, offering financial relief to individuals and families grappling with the high costs of treating specific serious diseases.

By understanding the eligibility criteria, the maximum deduction limits based on age, the list of specified diseases, required documentation, and the straightforward process for claiming the deduction, taxpayers can effectively manage their medical expenses and gain some respite in their tax liabilities.

It is essential for eligible taxpayers to gather and maintain all required documents and to be mindful of any reimbursements received, which need to be accounted for in the claim.

FAQS

Can I claim a Section 80DDB deduction for expenses incurred on treatment outside India?

No, the deduction under Section 80DDB is only applicable for treatments undertaken in India. Expenses incurred for treatments outside India are not eligible for this deduction. It is essential to undergo treatment in India and obtain a certificate from a government hospital within the country to claim this deduction.

What happens if the patient passes away after incurring the medical expenses but before the claim is made? Can the legal heir claim the deduction?

Yes, if the patient for whom the medical expenses were incurred passes away, the legal heir of the patient can claim the deduction under Section 80DDB in their income tax return. The legal heir must provide the necessary medical documents and proof of expenses incurred for the patient's treatment.

Is it necessary for the specialist doctor providing the certificate to be from a government hospital?

Yes, as per the rules of Section 80DDB, the medical certificate required to claim the deduction must be obtained from a specialist who is working in a government hospital. The certificate needs to specify the patient's details, the disease or ailment, and other relevant details as per the Income Tax Act's requirements. This is a mandatory condition for claiming the deduction under this section.

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