Taxpaying individuals who spend on medical expenses for treatment of specified diseases or ailments for self or dependents are eligible to claim tax deduction under Section 80DDB of the Income Tax Act, 1961. This provision is beneficial for those who have to meet high medical expenditures. One can claim the deduction for dependent family members such as spouse, children, and parents. The benefits are applicable only for the specified diseases under Section 80DDB.
In this article, we will discuss Section 80DDB benefits and the specific diseases it covers.
Eligibility to claim tax deduction under Section 80DDB
The following persons are eligible to claim the tax deduction for the expenses, under Section 80DDB medical treatment of specified diseases during the previous year:
- Resident individuals for self or dependant relative such as spouse, children, parents or siblings
- HUF (Hindu Undivided Family) for any member of Hindu Undivided Family
Non-resident Indians, corporate or other entities are not eligible to claim the deduction under section 80DDB.
Specific Diseases Covered under Section 80DDB
A person is eligible to claim a tax deduction on the medical treatment expenses for the Section 80DDB specified diseases as mentioned below:
- Neurological Diseases wherein the level of disability is certified to be 40% and above. It includes Dementia, Dystonia Musculorum Deformans, Motor Neuron Disease, Ataxia, Chorea, Hemiballismus, Aphasia, and Parkinson's Disease
- Chronic Renal Failure
- Malignant Cancer
- Full Blown Acquired Immuno-Deficiency Syndrome (AIDS)
- Hematological disorders – Hemophilia and Thalassaemia
Amount of Tax Deduction under Section 80DDB
The amount of the tax deduction is based on factors such as the patient’s age and amount of medical expenses. One can claim a tax deduction on the actual amount of medical expenditures incurred in the financial year or up to Rs. 40,000, whichever is less. Senior citizens and super-senior citizens are eligible to get a higher amount of deduction up to Rs 1 lakh.
Things to remember when availing deduction under Section 80DDB
It is essential to have the right knowledge about these tax benefits so that one does not face any hassle.
- For availing the tax deduction under Section 80DDB, it is mandatory to furnish documents that include a certificate from a specialist doctor (e.g., a neurologist for a neurological condition or such other specialist as prescribed). Also, the assessee must submit the prescription at the time of filing IT returns.
- The certificate should contain relevant details such as the patient’s name and age, disease or ailment, address, registration number, and qualification of the specialist issuing the prescription. Also, if the patient is getting treatment at a Government hospital, then the prescription should have the name and address of the hospital.
- The section 80DDB benefit is different from the Section 80D benefits that one gets as a deduction on the premium paid towards a health insurance plan.
- The tax deduction amount under Section 80DDB will be reduced if the specified medical treatment expenses are covered by an insurer under medical insurance or reimbursed by an employer.
The right investment decision at the right time can help secure your future in the best possible way. Get a health insurance plan today by Care Health Insurance (formerly Religare Health Insurance). You can avail tax deduction on the premium you pay, under Section 80D of the Income Tax Act. Visit the official website of the company to choose your health cover.