Section 80DDB

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. In this article, we will delve into the details of Section 80DDB, covering the diseases covered, the process of claiming deductions, and relevant documentation.

Who can claim a deduction under Section 80DDB of the Income Tax Act?

A deduction under Section 80DDB of the Income Income Tax 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:

1. 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.
2. 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.
3. 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.
4. 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.
5. 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.

Required documents to avail tax deduction under Section 80DDB

Diseases	Required Docs
Chronic Renal Failure	Medical certificate from a specialist doctor, either a nephrologist or a urologist, registered with the Medical Council of India. Details of the treatment undertaken, and costs incurred. Prescription and medical bills supporting the diagnosis and treatment expenses.
Full Blown Acquired Immuno Deficiency Syndrome (AIDS)	Medical certificate from a specialist doctor, such as an immunologist or infectious disease specialist, registered with the Medical Council of India. Details of the treatment and costs incurred. Prescription and medical bills supporting the diagnosis and treatment expenses.
Haemophilia, Hematological disorders, Thalassemia	Medical certificate from a specialist doctor, such as a haematologist, registered with the Medical Council of India. Details of the treatment undertaken, and costs incurred. Prescription and medical bills supporting the diagnosis and treatment expenses.
Malignant cancers	Medical certificate from a specialist doctor, such as an oncologist, registered with the Medical Council of India. Details of the treatment undertaken, and costs incurred. Prescription and medical bills supporting the diagnosis and treatment expenses.

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 — (a) Dementia (b) Dystonia Musculorum Deformans (c) Motor Neuron Disease (d) Ataxia (e) Chorea (f) Hemiballismus (g) Aphasia (h)Parkinsons Disease	Neurologist having a Doctorate of Medicine (D.M.) degree in Neurology or any equivalent degree, which is recognised by the Medical Council of India
(ii)	Malignant Cancers	Oncologist having a Doctorate of Medicine (D.M.) degree in Oncology or any equivalent degree which is recognised by the Medical Council of India
(iii)	Full Blown Acquired Immuno-Deficiency Syndrome (AIDS)	any specialist having a post-graduate degree in General or Internal Medicine, or any equivalent degree which is recognised by the Medical Council of India
(iv)	Chronic Renal failure	a Nephrologist having a Doctorate of Medicine(D.M.) degree in Nephrology or a Urologist having a Master of Chirurgiae(M.Ch.) degree in Urology or any equivalent degree, which is recognised by the Medical Council of India
(v)	Hematological disorders (i) Hemophilia (i) Hemophilia (ii) Thalassaemia	a specialist having a Doctorate of Medicine (D.M.) degree in Hematology or any equivalent degree, which is recognised by the Medical Council of India

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 is the Limit of Deduction Permitted under Section 80DDB?

Expenses for medical treatment of a dependent family member can be claimed under Section 80DDB. The maximum deductible amount is the lesser of:

• The actual expenses incurred for treatment
• Rs. 40,000 if the patient is below 60 years (otherwise Rs. 1 lakh)
• The deduction available under this section is subject to the following limitations:

Age of the Patient	Deduction
Below 60 years	Up to Rs 40,000
60 years but below 80 years	Up to Rs 1 lakh
Above 80 years of age	Up to Rs 1 lakh

 

What documents are required & 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.

Prescription format for claiming 80DDB deduction

The prescription format is standardised and should include the following details:

• Name, age, and address of the patient.
• Name, age, and address of the attending specialist doctor.
• Details of the disease diagnosed.
• The Registration Number of the specialist.

This prescription needs to be submitted along with the Income Tax Return.

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.

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).

List of related income tax deduction sections

Section 80CCD(2)	Section 80EEA
Section 80CCD(1B)	Section 80E
Section 80DD	Section 80CCD1
Section 80TTA	Section 80GG
Section 80DDB	Section 80CCD(2)

Additional Read: Explore Income Tax Section for Home Loan Interest Deduction