Section 80DDB of the Income Tax Act enables people who cannot afford regular health coverage premiums to reduce their tax obligations instead. By this, you are eligible for an 80DDB deduction for medical costs you or a dependent incur.
Because they are a type of personal expenditure, medical expenses are taxable. Medical spending can relate to a variety of medical costs, from the care of the disabled to specific diseases. All legal tax deductions from earned income or experienced losses for determining an individual’s tax obligations have been outlined in various parts of the Indian Income Tax Act, 1961. Among these parts, Section 80DDB provides information on the permissible deductions for costs incurred by individuals as well as HUFs as a result of specific disorders. This section outlines who is eligible for a tax deduction for various diseases as well as the maximum allowed.
The Indian Income Tax Act included section 80ddb of Income Tax, which enables people with certain ailments to deduct certain expenses from their taxable income. The Government provides tax deductions to HUFs and individuals under Section 80DDB for certain ailments based on expenses incurred for the cure of the illnesses specified in the Act. People may deduct medical expenses for themselves or dependents under section 80DDB of the Indian Income Tax Act. Dependents can be your spouse, your parents, your kids, or your dependant siblings. Only if the assessee’s residency status is listed as normally resident in the Income Tax Department’s records will they be able to make a deduction claim.
Who is Eligible to Avail from the Deduction Under Section 80DDB?
Section 80DDB tax deductions are only available for the following:
All individuals and Hindu Undivided Families (HUFs) are eligible for tax deductions. Provided that the entity in question has been a resident of India for the entire tax year and that the expense for the medical treatment is for the HUF or individual or a dependent family member, such as a parent, spouse, or sibling.
What is the Deduction Amount Under Section 80DDB of Income Tax?
The patient’s age and the amount spent are two criteria that affect the deduction amount.
The amount is limited to the lesser of The actual cost paid for the treatment or the sum of ₹40,000 (in the instance where the patient is a Normal Citizen). The highest 80ddb deduction limit is ₹1 lakh in cases where the patient is a senior citizen.
80DDB Deduction Limit
The age of the individual receiving medical care determines the exact amount of the deduction, not the age of the person requesting the deduction.
The deductions are often made about the costs incurred throughout the fiscal year.
When a dependent is already covered by insurance through a firm or insurer and receives compensation from the insurer or his employer, the amount of insurance must be deducted from the permitted deduction. For instance, you would be qualified for a deduction of ₹60,000 under this clause if you were entitled to ₹1 lakh and received ₹40,000 from the company providing insurance.
How Can Someone Claim a Deduction Under Section 80DDB? What Documentation is Needed?
When you file your ITR, you can use Section 80DDB to deduct certain expenses. There should be evidence that the prescribed medical care is truly being received, as well as a prescription from a physician stating that the patient has one of the illnesses listed in Section 80DDB.
The specialized doctor’s prescription is a crucial document for the same. Suppose the therapy was received at a government hospital. Any specialist who works full-time there and has a PG degree in internal medicine, general medicine, or an equivalent caliber might write the prescription. A prescription should also include the name and address of the government hospital.
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List of Conditions or Illnesses Listed in Section 80DDB of Income Tax Act
The following medical conditions and diseases are listed in Section 80DDB as being eligible for tax deductions:
- Diseases with a neurological component, such as ataxia
- Dystonia Deformed muscle of the rum
- Alzheimer’s disease
- Motor Neuron Disease in Chorea
- Persistent renal failure
- Invasive cancers
- Hematological conditions like:
- Acquired Immunodeficiency Syndrome in Full Force (AIDS).
Finance Act of 2015 Amendment to Deduction Under Section 80DDB of Income Tax Act
The Finance Act of 2015 revised Section 80DDB to make it easier and more straightforward for those who have medical conditions to seek tax deductions. The amendment states that all an assessee needs to do to make a deduction claim is to present a certificate that they have obtained from a physician who is an expert in the particular treatment for which they have sought care. The doctor could work for a privately owned hospital or a hospital that the government runs. Before the modification, the taxpayer in question was required to submit a certificate that had been issued by a specialist working for a government-run facility.
How Can One Get the Required Certificate?
According to the chart below, a Specialist can provide the certificate, and a certificate from a public hospital is not necessary for patients receiving care in a private hospital.
Any specialist employed full-time in a public hospital must issue the certificate to patients getting care there. A doctorate in general medicine or a comparable degree that the Medical Council of India accepts is required for such a specialty (MCI). Form 10I of the certificate is no longer necessary.
The certificate must include the patient’s name, age, name of the illness or condition, residence, registration number, and credentials of the doctor who issued the prescription. The government hospital’s name and address should also be included if the patient is getting care in a public hospital.
Medical disabilities are frequently debilitating and expensive to treat. According to Section 80DDB of the Income Tax Act, these expenses are deductible. A highly significant component of the Indian Income Tax Act: https://incometaxindia.gov.in/pages/acts/income-tax-act.aspx is Section 80DDB, which allows for tax benefits of up to ₹1 lakh for senior persons and up to ₹40,000 for expenses for treating certain diseases and disorders in other circumstances. All you need is a prescription from licensed medical professionals.
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