Section 80DDB: Deduction for Treatment of Specified Diseases

Section 80DDB of income tax act 1961 provides deduction for medical treatment of specified diseases. This deduction can only be claimed if an individual or HUF has incurred expenses towards the maintenance and care of the designated ailments. Following diseases are covered under 80DDB deduction:

• Neurological Diseases with a disability of at least 40%
• Malignant cancer
• AIDS
• Dementia
• Chronic Kidney failure
• Haemophilia
• Thalassemia

The taxpayer can claim this income tax deduction at the time of filing ITR under Chapter VI-A.

Who is eligible to claim 80DDB deduction?

Any of the following taxpayer or dependent who suffers from the diseases, qualify for the deduction under section 80DDB of income tax act:

In case of an individual:

• Any resident individuals who themselves suffer from the disease
• Any resident individual who pays for the support & maintenance of the dependent who undergoes for the treatement

(Dependent includes children, spuse, parents or siblings)

In case of HUF:

• Karta of the HUF
• Members of the HUF

What is 80DDB Deduction Limit?

The age of the person for whom the medical expenses are incurred determines the amount that can be claimed as a deduction under section 80TTB of income tax act.

Important Points:

• The deduction is allowed only up to the amount of expenditure incurred.
• Furthermore, the age of the individual receiving the medical care determines the amount of deduction rather than the age of the assessee or the person claiming the deduction.
• From 1st April 2016, no deduction shall be allowed unless the prescription is obtained for the treatment from a specialist. However, the specialist does not necessarily need to be working at a government hospital.
• While claiming a deduction under section 80DDB the amount has to adjusted with the reimbursement received by the insurance company or employer.
• Section 80DDB deduction is not allowed if the taxpayer opts for the new tax regime
• Deduction under section 80DDB of Income Tax Act can not be claimed against short-term capital gains u/s 111A, long-term capital gains, and income chargeable to tax at special rates.

How is the Deduction Calculated Under Section 80DDB?

To understand the calculation better, let us take an example:

Scenario 1:

Abhijeet is 35 years old and incurs an expense of INR 70,000 on the medical treatment of a specific disease. He is eligible to claim a maximum deduction of INR 40,000 under Section 80DDB. Abhijeet also receives INR 25,000 as reimbursement from the insurance company against the expenses he has incurred.

As Abhijeet has already been reimbursed for INR 25,000, he will be able to claim a deduction of INR 15,000 (INR 40,000 minus the amount received by the insurance company, i.e., INR 25,000) under Section 80DDB.

Scenario 2:

Ashutosh is 40 years old and incurs an expense of INR 70,000 on the medical treatment of a specific disease. His insurance company reimbursed INR 50,000 against the expenses he made.

In this scenario, Ashutosh will not be able to claim a deduction under Section 80DDB, as the reimbursement by the insurance company is already more than the permissible limit u/s 80DDB. (It is, however, important to note that if Ashustosh was to incur this expense for a senior citizen then, he will be permissible deduction under section 80DDB for Senior citizen will be upto Rs. 1,00,000)

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Acquire Certificate for Claiming Deduction Under Section 80DDB

As mentioned formerly, it is mandatory to provide a valid proof via certificate of the disease. A medical practitioner can issue the certificate as shown in the table below.

Earlier, a certificate was required to be obtained and submitted in Form No. 10-I to claim this deduction which has been duly omitted now. You can therefore acquire the same but it not mandatory to provide the form along with your income tax return in order to claim the deduction.

Tip

Earlier, a certificate was required to be obtained and submitted in Form No. 10-I to claim this deduction which has been duly omitted now. You can therefore acquire the same but it not mandatory to provide the form along with your income tax return in order to claim the deduction.

What Information Should the Certificate Contain?

The acquired certificate must have the following details:

1. Name and Age of Patient
2. Name of the Disease
3. Details of the specialist issuing the prescription, such as Name, Address, Registration Number, Qualification
4. The name and address of the hospital if the treatment was taken in a government hospital

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ITR Form Applicable for Section 80DDB

The taxpayer can claim deductions u/s 80DDB while filing ITR if all the conditions are met. Individuals or HUFs can claim 80DDB in any of the ITR forms, i.e., ITR 1, ITR 2, ITR 3, and ITR 4 depending upon their income sources.

Supporting Documents

Along with common documents like Form 16, PAN, etc, it is mandatory for the assessee to provide proof of expenditure, such as medical bills. Therefore, it is compulsory to obtain a prescription for such treatments from a qualified doctor.

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