Section 80DDB: Who Can Claim Tax Deductions?

Posted on: Jan 20, 2023 | | Written by:

Section 80DDB: Who Can Claim Tax Deductions?

Published on January 20, 2023. EST READ TIME: 4 minutes

Thanks to the rising cost of healthcare facilities, buying a health insurance policy is a must to protect oneself and family members from financial losses. But there are many ailments that are quite costly and aren’t covered by healthcare plans. The treatment of any major ailment can cause substantial financial losses to a family. However, there is one benefit an individual can avail of under Section 80DDB of the Income Tax Act - deduction for treatment of specified diseases for self or dependents. Well, let’s learn more about this type of tax deduction.

Who can Claim Deductions under Section 80DDB?

The tax deductions can be claimed by:

1. Individuals and Hindu Undivided Families (HUFs) who are residents of India. They should be residing in India in that particular financial year. Non-residents of India cannot avail of this benefit.

2. Taxpayers who have incurred expenses on medical treatment of self or dependents like spouse, parents, siblings, or children.

How much Deduction can be Claimed under Section 80DDB?

The deduction under 80DDB is based on the age of the person seeking medical treatment and the actual expenses incurred. It is not based on the age of the person who is claiming the deduction.

• If the patient is less than 60 years of age, the deduction amount is INR 40,000 or actual cost of treatment, whichever is less

• If the patient is aged 60 years or more, the deduction amount is INR 100,000 or actual cost of treatment, whichever is less

• If the patient is aged 80 years or more, the deduction amount is INR 100,000 or actual cost of treatment, whichever is less

However, there are certain exclusions which you must be aware of while claiming tax deductions under section 80DDB.

Diseases or Medical Ailments Specified under Section 80DDB

Under 80DDB, you can claim a tax deduction for the following diseases:

1. Neurological diseases such as dementia, Parkinson’s disease, ataxia, chorea, motor neuron disease, aphasia, hemiballismus, and dystonia musculorum deformans. The disability level must be 40% and more, as certified by a neurologist.

2. Malignant cancers

3. Chronic renal failure

4. Full-blown AIDS

5. Haemophilia

6. Thalassaemia

Documents Required to Claim Deduction under Section 80DDB

For claiming tax deduction under Section 80DDB, you have to provide proof of the treatment which should be supported by the below documents:

1. Medical certificate, which must be issued by an authorised medical practitioner. You have to submit this certificate to the Income Tax Department at the time of filing tax returns.

2. A self-declaration certificate mentioning all the medical expenses that you have incurred, including training and rehabilitation of the disabled dependent.

3. Receipts of insurance premiums that you have paid.

What should be Mentioned in the Prescription?

The prescription must have the following details:

• Patient’s name and age

• Name of the disease for which the patient is seeking treatment

• The specialist’s details, such as name, qualification, registration number, and address

Budget 2018: Amendment to Section 80DDB

The Budget 2018 amended Section 80DDB by enhancing the tax deduction on medical treatment incurred on specific diseases for senior and super senior citizens to INR 1 lakh. Prior to this, the maximum tax deduction that one could avail of was INR 60,000 for senior citizens (aged 60-80 years) and INR 80,000 for super senior citizens (aged 80 years and above). With medical inflation and the geriatric population’s need for regular medical attention, this amendment came as a big relief.

FAQs

1. What diseases are covered under Section 80DDB?

The diseases for which you can claim deduction under Section 80DDB are neurological diseases (the disability level should be 40% and more) like Parkinson’s disease, dementia, aphasia, ataxia, chorea, motor neuron disease, hemiballismus, dystonia musculorum deformans as well as malignant cancers, renal failure, AIDS, haemophilia and thalassemia.

2. Do I need to submit any proof for claiming a deduction?

Yes. A valid medical certificate or prescription issued by an authorised medical practitioner is a must. It should have details like the patient’s name and age, specialist’s name, qualification, registration number, address, and name of the disease.

3. If my treatment expenses are less than the maximum limit, can I still claim the maximum amount permitted?

No. The deductions can be claimed only for the actual expenses. For instance, if the deduction amount is capped at INR 40,000 and your actual expenses are INR 30,000, you can claim only INR 30,000.

4. My mother has been diagnosed with cancer. Can I claim tax benefits under Section 80DDB?

Yes. Cancer is among the listed diseases under Section 80DDB, and you can claim 80d tax benefit for the expenses incurred on the treatment for your dependent parents.

5. Is Section 80DDB only for self?

No, a taxpayer can claim tax deduction either for self or dependents such as spouse, children, parents or dependent siblings.

Conclusion

Deductions under Section 80DDB are based on a patient’s age as well as actual expenses incurred. However, this deduction is only for diseases specified in Section 80DDB of the Income Tax Act. To secure yourself and your family financially for other medical needs, you should have health insurance. Depending on your family size and health conditions, you can choose a family health insurance plan or an individual health insurance policy for each family member.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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