Income tax laws in India provide various avenues for individuals to save on taxes by offering deductions for specified expenses. Section 80DDB is one such provision that allows taxpayers to claim deductions for expenses incurred on the treatment of certain specified diseases for themselves or their dependants. The diseases eligible for deduction under this section are listed in Rule 11DD of the Income Tax Regulations. In this article, we will delve into the details of Section 80DDB, covering the diseases covered, the process of claiming deductions, the deduction limits, and relevant documentation.
Who can claim a deduction under Section 80DDB of the Income Tax Act?
A deduction under Section 80DDB of the Act can be claimed by both individuals and Hindu Undivided Families (HUFs). However, there are specific eligibility criteria that individuals must meet to qualify for this deduction. Here are the key points:
- Residential status: The deduction is available only to resident individuals and Hindu Undivided Families. Non-residents are not eligible to claim benefits under this section.
- Treatment expenses for specified persons: The taxpayer can claim a deduction for the amount spent on the medical treatment of specified diseases for themselves or their dependants. Dependents include parents, spouses, children, siblings, or any other family members who are wholly or mainly dependent on the taxpayer.
- Disease and disability criteria: The deduction is applicable for the treatment of specified diseases, and the level of disability must be 40% or more. The list of specified diseases is mentioned in Rule 11DD of the Income Tax Rules.
- Prescription from a specialist doctor: To claim the deduction, the taxpayer needs to obtain a prescription from a specialist doctor specifying the details of the disease, the patient, and the disability level. The prescription should include the name and registration number of the specialist.
- Actual amount spent or specified limit: The deduction is limited to the actual amount spent on the treatment or the specified limit, whichever is less. Taxpayers should retain the bills and receipts as proof of expenses.
Limit of deduction permitted under Section 80DDB
Financial year |
Individuals < 60 years |
Senior citizen |
Super senior citizen |
FY 2018-19 and onwards |
Rs 40,000 or the amount actually spent, whichever is lower. |
Rs 1,00,000 or the amount actually spent, whichever is lower. |
Rs 1,00,000 or the amount actually spent, whichever is lower. |
FY 2015-16 to FY 2017-18 |
Rs 40,000 or the amount actually spent, whichever is lower. |
Rs 60,000 or the amount actually spent, whichever is lower. |
Rs 80,000 or the amount actually spent, whichever is lower. |
FY 2014-15 |
Rs 40,000 or the amount actually spent, whichever is lower. |
Rs 60,000 or the amount actually spent, whichever is lower. |
Rs 60,000 or the amount actually spent, whichever is lower. |
Suppose an individual spent Rs 80,000 during FY 2024-25 on treating a specified illness and received Rs 30,000 from an insurance provider. In that case, he can claim only Rs 10,000 under the section (Rs 40,000 minus Rs 30,000 insurance payout).
Similarly, if a senior citizen faces the same situation, he can claim Rs 70,000 (Rs 1,00,000 minus Rs 30,000) as per the allowed limit for senior citizens under this section.
Taking another example, if a taxpayer pays Rs 80,000 in FY 2024-25 for medical expenses and gets Rs 60,000 reimbursed by an insurer, then he cannot claim any deduction because the insurance amount is higher than the Rs 40,000 limit.
However, if the taxpayer is a senior citizen, he can claim a deduction of Rs 20,000 (Rs 80,000 minus Rs 60,000) in this case.
Things to remember while claiming deduction under Section 80DDB
For individual taxpayers, dependents include the spouse, children, parents, and siblings of the taxpayer. In the case of a Hindu undivided family (HUF), a dependent is any member of that family.
To claim this deduction, it is essential to have a certificate from a specialist doctor. The specialist may vary depending on the illness, such as a neurologist, oncologist, urologist, haematologist, immunologist, or any other appropriate expert.
If the taxpayer gets medical expense reimbursement from insurance or an employer, the deduction claimed will be the total eligible amount minus the reimbursed amount. This ensures that the taxpayer does not get a double benefit on the same expense.
To summarise, an individual or HUF can claim a deduction for medical expenses on specified diseases up to Rs. 40,000 or Rs. 1,00,000, depending on the case.
How to obtain the certificate for the disease for Section 80DDB deduction?
- The certificate must be issued by a specialist.
- Patients treated at private hospitals do not need to get the certificate from a government hospital.
- Those receiving treatment in a government hospital must get the certificate from a full-time specialist at that hospital. The specialist should hold a postgraduate degree in General Medicine or an equivalent qualification recognised by the Medical Council of India (MCI).
What should be mentioned in the certificate?
To be valid, the certificate should include:
- Patient’s name and age,
- The disease or ailment diagnosed,
- Name, address, registration number, and qualifications of the specialist issuing it,
- Name and address of the hospital, if treatment is at a government hospital.
Required documents to avail tax deduction under Section 80DDB
Diseases |
Required Docs |
Chronic Renal Failure |
|
Full Blown Acquired Immuno Deficiency Syndrome (AIDS) |
|
Haemophilia, Hematological disorders, Thalassemia |
|
Malignant cancers |
|
Deductions under Section 80DDB of the Income Tax Act?
Deductions under Section 80DDB of the Income Tax Act are aimed at providing relief to taxpayers for the expenses incurred on the medical treatment of specified diseases. Here are the key aspects of deductions under Section 80DDB:
1. Eligible taxpayers:
- Individuals: Resident individuals are eligible to claim deductions under Section 80DDB for themselves or their dependants.
- Hindu Undivided Families (HUFs): HUFs can also claim deductions for the medical treatment of specified diseases incurred on behalf of their members.
2. Specified diseases:
Section 80DDB covers a list of specified diseases, including but not limited to:
- Neurological diseases with a disability level of 40% or more
- Malignant cancers
- AIDS
- Chronic renal failure
3. Disability criteria:
The specified diseases must be accompanied by a disability level of 40% or more, as certified by a specialist doctor.
4. Treatment expenses:
Taxpayers can claim deductions for the actual amount spent on the medical treatment of the specified diseases. This includes expenses on hospitalisation, medicines, diagnostic tests, and other related costs.
5. Prescription requirements:
Taxpayers need to obtain a prescription from a specialist doctor for claiming the deduction. The prescription should include details such as the patient's name, age, and address, the disease diagnosed, and the name and registration number of the specialist.
6. Actual amount spent or specified limit:
The deduction is limited to the actual amount spent on the treatment or the specified limit, whichever is less. Taxpayers should keep the bills and receipts as proof of expenses.
7. Forms for claiming deduction:
Taxpayers need to furnish the details of the deduction in their Income Tax Return. There is no separate form for claiming the deduction under Section 80DDB.
8. Tax benefits:
The amount claimed as a deduction under Section 80DDB is subtracted from the taxpayer's total income, thereby reducing the taxable income and resulting in a lower tax liability.
9. Compliance and documentation:
Taxpayers should ensure compliance with the eligibility criteria and maintain proper documentation, including the prescription and bills, as these may be required for verification by tax authorities.
What is the list of specified diseases under Section 80DDB?
The list of specified diseases under Section 80DDB of the Income Tax Act is provided in Rule 11DD of the Income Tax Rules. As of my knowledge the cut-off date in January 2022, the specified diseases for which a taxpayer can claim a deduction under Section 80DDB include:
Serial No. |
Disease |
Certificate to be taken from |
(i) |
Neurological Diseases where the disability level has been certified to be of 40% and above — |
Neurologist having a Doctorate of Medicine (D.M.) degree in Neurology |
(ii) |
Malignant Cancers |
Oncologist having a Doctorate of Medicine (D.M.) degree in Oncology |
(iii) |
Full Blown Acquired Immuno-Deficiency Syndrome (AIDS) |
any specialist having a post-graduate degree in General or Internal Medicine, |
(iv) |
Chronic Renal failure |
a Nephrologist having a Doctorate of Medicine(D.M.) degree in Nephrology |
(v) |
Hematological disorders |
a specialist having a Doctorate of Medicine (D.M.) degree in Hematology |
It is important to note that the list is not exhaustive, and other diseases may also be included based on the severity of disability and certification by a specialist doctor. Taxpayers should refer to Rule 11DD for the most updated and comprehensive list of specified diseases eligible for a deduction under Section 80DDB.
What documents are required and how to claim deduction u/s 80DDB?
To claim a deduction under Section 80DDB, the taxpayer needs to obtain a prescription from a specialist doctor. The prescription should contain details such as the name and age of the patient, the disease diagnosed, and the name and registration number of the specialist issuing the prescription.
Additionally, the taxpayer needs to submit the actual bills or receipts of the expenses incurred on the treatment. It is crucial to keep these documents safely, as they may be required for verification by tax authorities.
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How to adjust the amount of deduction with any reimbursement?
Under Section 80DDB, eligibility for deduction hinges upon adjustments made by the insurer's payment toward health insurance or reimbursement from the employer.
For instance, if a taxpayer spends Rs. 60,000 on medical treatment for a specified illness, they can claim a deduction of Rs. 40,000 under Section 80DDB. However, if they receive Rs. 30,000 from an insurer, their deductible amount reduces accordingly. Thus, they can only claim Rs. 10,000 (Rs. 40,000 minus Rs. 30,000).
If the insurer pays Rs. 50,000 for a Rs. 60,000 claim, surpassing the Rs. 40,000 limit, no deduction is possible under Section 80DDB. Moreover, for senior citizens, the allowable deduction is higher at Rs. 1,00,000 minus the insurance payout (e.g., Rs. 50,000).
In conclusion, Section 80DDB of the Income Tax Act provides a valuable avenue for taxpayers to claim deductions for expenses incurred on the treatment of specified diseases. It is essential to understand the eligibility criteria, maintain proper documentation, and follow the prescribed formats to avail the benefits under this section. Utilising an income tax calculator can help assess potential deductions accurately. As always, consulting with a tax adviser for personalised guidance is recommended.
Additional read: Explore Income Tax Section for Home Loan Interest Deduction
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