Chapter VI A of the Income Tax Act, 1961 provides the details on the permissible deductions from your gross total income under sections 80C to 80U. According to section 80A, the permissible deductions cannot be more than your gross total income.
Medical expenses are subject to taxes and can be related to any costs incurred for treating specified diseases to sustain the lifestyle of a disabled individual.
The Income Tax Act, 1961 allows certain deductions for medical expenses incurred for treating patients suffering from certain specified diseases.
What is section 80DDB?
As per section 80DDB of the Income Tax Act, 1961, if you incur medical expenses for treating a specified ailment, such costs are permitted for tax deductions.
However, the deductions will be subject to the terms and conditions specified under this section.
Moreover, while availing of benefits under this section, you should confuse it with the deductions allowed towards the premium paid on health insurance purchased for covering such ailments.
The tax benefits on health insurance premiums are covered under section 80D of the Income Tax Act, 1961.
Why is section 80DDB important?
Section 80D provides tax benefits on the premium paid for health insurance plans. In addition to these, you can further reduce your tax liability if you are seeking treatment for certain specified ailments.
The 80DDB deduction is also available if your spouse, parents, children, or dependent siblings suffer from the specified ailments under this section.
Deductions allowed under section 80DDB
This section specifies the deductions available on the treatment costs incurred for certain ailments.
As per the provisions of this section, if an individual or a Hindu Undivided Family (HUF) incurs medical expenses for treating specified illnesses, these costs are eligible for tax deductions subject to the terms and conditions.
Who can claim a tax deduction under section 80DDB?
The following taxpayers can claim 80DDB deductions for expenses incurred towards the treatment of specified ailments.
- Resident individuals for self, children, spouse, siblings, and parents
- HUF for any family member
The patient must be wholly or partially dependent on the taxpayer for support and maintenance.
The deduction cannot be claimed under short-term and long-term capital gains, winnings from the lottery, or others.
Benefits under this section are not available for Non-Resident Indians (NRIs).
List of specified diseases under section 80DDB
The specified diseases under section 80DDB are as follows:
- Neurological ailments where certified disability level is 40% or higher, such as Dementia, Parkinson’s Disease, Dystonia Musculorum Deformans, Hemiballismus, Aphasia, Chorea, Motor Neuron Disease, Ataxia
- Malignant cancers
- Chronic renal failure
- Full-blown Acquired Immuno-Deficiency Syndrome (AIDS)
- Hematological disorders like thalassemia and hemophilia
Whose medical treatment is allowed as a deduction under section 80DDB?
Deductions under this section can be claimed only by the taxpayer who actually incurs the treatment expenses.
Eligible taxpayers may claim the deduction for the treatment of the following patients.
- Individual taxpayers: Treating specified ailments for self or dependents; as per the provisions of this section, dependents include spouse, children, siblings, and parents.
- HUFs: The deduction can be claimed for treatment costs incurred for any member of the family.
Required documents to claim tax deduction u/s 80DDB
To claim the tax benefits under this section, you need to provide proof for the need for the treatment along with proof that the treatment has actually been administered to the patient.
Therefore, it is mandatory to procure a prescription from a qualified medical practitioner.
Earlier, the prescription had to be taken from doctors working in government hospitals.
However, this rule was relaxed from the Assessment Year 2016–2017 and you can now obtain the prescription from any qualified medical practitioner.
According to the revised Rule 11DD, you can get the prescription as mentioned below:Neurological disorders Neurologist holding Doctorate of Medicine in Neurology or any equivalent degree Malignant cancers Oncologist holding Doctorate of Medicine in Oncology or any equivalent degree AIDS Specialist holding a Post Graduate Degree in Internal or General Medicine or any equivalent degree Chronic renal failure Nephrologist holding Doctorate of Medicine in Nephrology or Urologist holding Master of Chirurgiae in Urology or equivalent degree Hematological disorders Specialist holding Doctorate of Medicine in Hematology or equivalent degree
Moreover, the degrees must be recognized by the Medical Council of India.
The amount allowed as a deduction under section 80DDB
The deduction amount depends on two factors, which are the patient's age and the actual expenses incurred for the treatment.
The maximum amount is capped at the lower of INR 40,000 (for patients who are not senior citizens) or the actual expenses incurred. In case the patient is a senior citizen, the maximum amount is lower than actual costs or INR 1 lakh.
What details need to be mentioned in the prescription?
In addition to getting the prescription from a qualified medical practitioner holding the appropriate degree, here are the details that have to be clearly mentioned on the prescription.
- Name and age of the patient
- Details of the chronic ailment
- Name, address, and registration information of the medical practitioner
- If treatment is undertaken in a government hospital, details about the name and address of the facility
- Signature of the doctor or department head (in case of government hospital)
Form format of Section 80DDB
How can you fill section 80DDB form?
Follow the below-mentioned steps to complete Form 10-1 to claim the deduction:
- Provide the name, address, and father’s name of the patient needing the treatment
- Enter name, address, and relationship between the taxpayer (who is bearing the treatment expenses) and the patient
- Specify the details of the chronic ailment as per Rule 11DD
- Mention the severity of the disease (40% or higher)
- Name, address, qualification, and registration number of the medical practitioner administering the treatment
- If a patient is undergoing treatment in a government hospital, enter the healthcare institution’s name and address
How can you get a certificate for claiming tax deduction u/s 80DDB?
You can get the certificate from the relevant specialist as mentioned above. If the treatment is being administered in a private hospital, a certificate from a government hospital is not required.
Patients seeking treatment in a government hospital can get the certificate from a full-time specialist holding a post-graduate degree in general medicine or equivalent degree recognized by the Medical Council of India.
Who can give a certificate under section 80DDB?
Any specialist holding a post-graduate degree or an equivalent degree, which is recognized by the Medical Council of India can give the certificate.
Medical costs, especially for chronic ailments can be huge and may affect your financial stability.
The Income Tax Act, 1961 offers deductions on treating health conditions as per the 80DDB disease list of up to INR 40,000 (for regular citizens) and up to INR 1 lakh for senior citizens.
To claim the deduction, you need a certificate from a qualified medical practitioner.
Frequently Asked Questions (FAQs)
Can you claim benefits under sections 80D and 80DDB?
Yes, benefits under both sections can be claimed; however, you need to meet the terms and conditions to avail of these.
However, if you receive any reimbursement from an insurance company, it has to be adjusted while claiming benefits under section 80DDB.
For example, if you receive INR 20,000 from an insurance company and the total medical expenses are INR 45,000, you can claim only INR 15,000.
What is the difference between 80D and 80DDB?
Section 80DD covers treatment and maintenance expenses incurred on behalf of disabled dependents while section 80DDB covers treatment costs for certain specified ailments of self and dependents.Section 80DD Section 80DDB Benefit provided to Taxpayers incurring medical expenses on behalf of disabled dependent Taxpayers incurring expenses for treating specified ailments for self or dependent Deduction amount INR 75,000 (non-severe disability) INR 1,25,000 (severe disability) Lower of actual cost incurred or INR 40,000 (patient aged below 60 years) or INR 1 lakh for senior citizen patients aged over 60 years
Is paralysis covered under section 80DDB?
Yes, paralysis is a neurological disorder and is covered under this section.
Is heart disease covered under section 80DDB?
No, heart disease is not covered under this section as it is not within the list of specified ailments as per Rule 11DD.
Can NRIs claim section 80DDB benefits?
No, the benefits under this section are available only to individual taxpayers and HUFs.
Is stroke rehabilitation covered under Section 80DDB?
No, since stroke is not part of the specified list, rehabilitation or other expenses are not covered under this section.
Is diabetes covered under section 80DDB?
This section of the Income Tax Act, 1961 specifies a list of chronic ailments for which deduction is available; diabetes is not part of this list, and therefore, it is not covered.
Which ailments are covered under section 80DDB?
Section 80DDB income tax deductions are available for the following ailments:
- Hematological disorders
- Neurological disorders where disability is 40% or more
- Chronic renal failure
- Malignant cancers
Can you claim medical bills under section 80DDB?
Yes, the person paying the medical bills for diseases specified under this section can claim these.
Can you claim dental treatments under section 80DDB?
No, such treatments are not covered under this section.
This is a companion discussion topic for the original entry at https://jupiter.money/resources/guide-to-section-80ddb/