Section 80DDB of the Income Tax Act of 1961 provides deductions to the assessee with respect to amounts incurred for medical treatment of stated diseases.

Section 80DDB of the Income Tax Act, a tax-saving provision created by the Indian government, enables taxpayers to deduct expenses related to several different ailments. This clause includes coverage for both personal expenses and those incurred by a person’s dependents, such as their spouse, children, and parents. According to the records of the Income Tax Division, the deduction is only valid for individuals who are considered to be regular residents of India. Learn more about this area and how it can help taxpayers by reading on.

The primary objective behind the introduction of Section 80DDB in the Income Tax Act of 1961 was to allow the deduction of the expenses incurred by a person facing a particular stated disease from their taxable profit. The government of India has prescribed some particular diseases, and if assesses incur expenses for those diseases, then they could claim a deduction of expenses. Notably, expenses may be incurred for themselves or dependents as well, and in this section, dependents include parents, spouses, children, or a dependent sister or brother. Moreover, the deduction in this section would be allowed only when the assessee has the status of an ordinary resident of India in the records of the Income Tax Division.

Deduction Under Section 80DDB

Section 80DDB allows for deductions on medical expenses incurred for treating specific diseases or illnesses.

Individuals or HUFs are eligible for a deduction under Section 80DDB of the Income Tax Act if they have incurred medical costs for the treatment of a specific sickness or ailment. The deduction, however, is restricted and has a cap on how much it can be.

Not to be confused with payments paid towards health insurance premiums that cover such diseases or disorders, this section expressly refers to the medical costs incurred for treating certain diseases or conditions. The Income Tax Act’s Section 80D governs the payment for health insurance.

Who Can Claim the Deduction Under Section 80DDB

Under Section 80DDB, only individuals and HUFs are permitted to make claims; corporations are not permitted. Additionally, the deduction is only available to Indian citizens who were residents of India during the applicable year; non-resident Indians are not eligible to use this deduction.

Moreover, it is essential to note that only the person who has borne the medical expenses can claim the deduction. Hence, for Section 80DDB, the deduction can only be claimed by the individual or HUF who has incurred such medical expenses.

Whose Medical Treatment can be Allowed as a Deduction Under Section 80DDB

To claim a deduction under section 80DDB, the person who incurs the medical expenses must be the one to claim it. Nevertheless, the medical expenses can be for the treatment of the following individuals:

For individuals, Section 80DDB allows medical expenses incurred on the treatment of the assessee or their dependents, including spouses, children, parents, brothers, and sisters. The dependent must be dependent on the individual for their maintenance and support.

In the case of a Hindu Undivided Family (HUF), the deduction under Section 80DDB can be claimed if the medical expenses are incurred for the treatment of any member of the HUF.

What Kind of Medical Treatments are Allowed Under Section 80DDB

To claim a deduction under Section 80DDB for medical expenses, the expenses must be incurred for the treatment of specified diseases or ailments. The diseases eligible for deduction are listed in Rule 11DD of the Income Tax Act and include the following:

Neurological diseases that have been certified by a specialist with a level of disability of 40% or more are eligible for deduction under Section 80DDB. These diseases include Dementia, Dystonia Musculorum Deformans, Chorea, Motor Neuron Disease, Ataxia, Aphasia, Parkinson’s Disease, and Hemiballismus.

• Malignant Cancer
• AIDS- Acquired Immuno-Deficiency Syndrome
• Chronic Renal failure
• Hematological disorders like Hemophilia or Thalassaemia.

Therefore, the purpose of this section is to include medical treatment for significant diseases and illnesses, excluding medical expenses that are more typical, such as cataract surgery or a C-section.

Eligibility for Claiming a Deduction

To claim a deduction under Section 80DDB, the taxpayer must be an individual or a HUF. Thus, in the case of a company or any other entity, the deduction in the cited section is not available. Furthermore, individuals and HUFs must have been residents of India during the relevant fiscal year to qualify for a deduction. Therefore, non-residents of India are not eligible for a deduction under this section.

Documents Required

To claim tax deductions under Section 80DDB, having a prescription is a prerequisite. Below are the prescriptions that individuals need for certain diseases:

Diseases	Prescription Issued By
Chronic Renal Failure	Nephrologist: DM or equally recognized degree, Urologist: MCh in Urology or equivalent degree
Full Blown Acquired Immuno Deficiency Syndrome (AIDS)	Specialist: PG in general or internal medicine or equivalent degree
HaemophiliaHematological disordersThalassemia	Specialist: DM in Hematology or equally recognized degree
Malignant cancers	Oncologist: DM or equally recognized degree
Neurological disease: 40% and above disabilityAtaxiaAphasiaChoreaDementiaDystonia musculorumdeformansHemiballismusMotor Neuron DiseaseParkinsons disease	Neurologist: Doctorate of Medicine (D.M.) in Neurology or any equivalent degree.

What Should Be Mentioned in the Prescription

The Income Tax Department requires the following information to be included in the certificate:

• Name of the Patient
• Age of the Patient
• Name of the ailment or the disease in question
• Details of the specialist such as:
  • Name
  • Address
  • Qualification
  • Registration Number

• If the treatment of the patient is taking place at a government-owned hospital, then the name of the hospital as well as its address will have to be mentioned in the certificate.

What Amount Can be Claimed as Deduction Under Section 80DDB

The deduction amount available under Section 80DDB depends on the age of the person for whom the medical expenses are incurred.

If medical treatment expenses are incurred for an individual, their dependent, or a member of HUF, the deduction amount is limited to the lower of the actual amount paid or forty thousand rupees.

For this section:

• Senior citizen refers to a resident Indian who is 60 years or older at any time during the relevant previous year.
• Very senior citizen refers to a resident Indian who is 80 years or older at any time during the relevant previous year.
• The amount of deduction under Section 80DDB is based on the age of the person for whom the medical expenses were incurred:

Age of the person who is availing of medical treatment	Amount of deduction (₹)
Age less than 60 years	₹ 40,000 or actual expenses, whichever is less
Senior Citizens- aged 60 years and above	₹ 1,00,000 or actual expenses, whichever is less
Very Senior Citizens- Aged 80 years and above	₹ 1,00,000 or actual expenses, whichever is less

Whose Medical Treatment Could Be Allowed as a Deduction?

In section 80DDB, deduction of the expenses can be claimed by the taxpayer incurring them. Though some medical expenses may be incurred for the treatment of the following individuals:

1. Individual: In the case of an individual, the medical expenses could be incurred by the person for their treatment or the treatment of a dependent.
2. HUF: A deduction would be allowed if the HUF incurred medical expenses for the treatment of any of its members.

Things to remember:

• The deduction under Section 80DDB can only be claimed for actual expenses incurred during the relevant previous year.
• The amount of deduction is based on the age of the person receiving the medical treatment and not the age of the assessee or the person claiming the deduction.
• The deduction amount under Section 80DDB does not include deductions claimed under any other section covered by Chapter VI A.

Adjust the Amount of Deduction with any Reimbursement

The deduction sought under Section 80DDB should be reduced by any sum paid by an employer or received from an insurer for a health insurance policy.

An assessee may claim a deduction of ₹ 40,000 under Section 80DDB if they spend ₹ 60,000 for medical care for a certain condition or ailment. However, the deduction they can make under Section 80DDB will be diminished by this sum if they get ₹ 30,000 from an insurance provider for these costs. In this situation, the taxpayer is only permitted to use Section 80DDB to deduct ₹ 10,000 (or ₹ 40,000 minus ₹ 30,000).

The assessee cannot claim any deductions under Section 80DDB if the sum paid from the insurance company for the medical bill of ₹ 60,000/- is greater than the allowable limit of ₹ 40,000/-, which is ₹ 50,000/-. However, if the patient is a senior citizen, he may be able to deduct ₹ 1,000,000 from his taxes (the amount that can be deducted under Section 80DDB for senior citizens is ₹ 1,000,000 less the amount that was paid by the insurance company, which is ₹ 50,000).

Section 80DDB Form Format

Section 80DDB allows people to write off the costs of treating particular illnesses or disorders for themselves or their dependents. The format for Section 80DDB is as follows.

How to Fill Section 80DDB Form

Here are the steps to complete the Section 80DDB form:

• Provide the name of the applicant.
• Provide the applicant’s father’s name and address.
• Provide the name and address of the person on whom the applicant is dependent.
• Indicate the relationship between the applicant and the dependent person.
• Enter the name of the disease (refer to Rule 11DD).
• Indicate the disability level.
• Provide the name and address of the government hospital.
• Enter the doctor’s name, address, qualification, and registration number.
• Sign the form and verify that the information provided is accurate.

Section 80DDB for Senior citizen

In Section 80DDB, which allows deductions for the medical treatment of specific diseases for people and HUF, a rise in the deduction ceiling for senior persons was suggested in the 2018 budget. The proposal intends to change Section 80DDB’s provisions to raise the deduction cap for senior persons and super senior citizens from ₹ 60,000 to ₹ 1 lakh, up from ₹ 80,000 now.

Medical Treatments Allowed Under Section 80DDB

The medical ailments and diseases for which tax deductions can be claimed under Section 80DDB are listed as follows:

Diseases that are neurological such as:

• Ataxia
• Dementia
• Aphasia
• Dystonia Musculo rum Deformans
• Hemiballismus
• Parkinson’s Disease
• Chorea
• Motor Neuron Disease
• Chronic Renal Failure
• Malignant Cancers
• Hematological Disorders such as:
• Thalassemia
• Hemophilia
• Full Blown Acquired Immuno-Deficiency Syndrome (AIDS)

Whose Medical Expenses Can Be Claimed Under 80DDB?

• Under Section 80DDB, taxpayers or their dependents who have one of the qualifying disorders are eligible for a deduction.
• A HUF or an individual taxpayer may claim the deduction.
• Indian residents must be taxpayers or dependents.
• When the taxpayer has paid for a dependent’s medical care, they are eligible to claim the deduction.
• A spouse, child, parent, or sibling can be considered a dependent.
• If an insurance or an employer additionally pays the dependent, their payments must be subtracted from the deduction.

The Extent of Deduction that can be claimed under Section 80DDB

The deductions that can be claimed under Section 80DDB are based on the following assessment years and amounts:

• Starting from the financial year 2018-2019 (Assessment Year 2019-20 onwards)
• Normal citizens can claim a deduction of either ₹ 40,000 or the amount paid to the medical institution (whichever is lower)
• Senior citizens and super senior citizens can claim a deduction of either ₹ 1 lakh or the amount paid to the medical institution (whichever is lower)

Financial Year 2017-2018 (Assessment Year 2018-19)

• Normal citizens: actual amount paid or ₹ 40,000, whichever is lower
• Senior citizens between 60 and 80 years: actual amount paid or ₹ 60,000, whichever is lower
• Senior citizens above 80 years: actual amount paid or ₹ 80,000, whichever is lower

From the Financial Year 2015-2016 (Assessment Year 2016-17 Onwards)

• The actual amount paid for medical treatment or ₹ 40,000, whichever is lower.
• For senior citizens between the ages of 60 and 80, the actual amount paid for medical treatment is ₹ 60,000, whichever is lower.
• For senior citizens above the age of 80, the actual amount paid for medical treatment or ₹ 60,000, whichever is lower.

Acquisition of Certificate of the Disease

An individual must get a sickness certificate to qualify for a tax deduction under Section 80DDB.

The following adjustments have been made by the income tax division to make it simpler to obtain this certificate:

For patients receiving medical treatment at a private hospital:

• The disease certificate can be obtained from the same hospital.
• It is not necessary to obtain the certificate from a government hospital.
• The certificate must be obtained from a specialist who holds a degree in their field of specialization recognized by the Medical Council of India.

For patients receiving medical treatment at a government hospital:

• The certificate must be obtained from a full-time specialist employed at the hospital.
• The specialist must hold a post-graduate degree in general medicine, internal medicine, or a related field recognized by the Medical Council of India.
• Form 101 certificate of the disease is not required.

Section 80DDB Finance Act 2015 Amendment

The Finance Act changed Section 80DDB in 2015 to make it easier for persons to seek tax deductions for their medical expenses. An assessee now just needs to present a certificate from a physician with expertise in the type of treatment for which they received care to make a deduction claim. The doctor may work for a hospital that is privately or publicly owned. Previously, a certificate from a specialist doctor employed at a government-run hospital was needed from the taxpayer.

Name of Specified Disease Mentioned in Section 80DDB of the Income Tax Act, 1961

Since deductions would be allowed in this section only when expenses are incurred for a specified disease, Following are the names of specified diseases that have been mentioned in the section 80DDB:

• Cancer
• Chronic renal failure
• An expert-identified neurological disease in which the extent of disability is at least 40%.
• AIDS
• Hematological disorder

Based on this, this section aims to include medical treatment for significant diseases and will not include medical expenses that are more usual, such as a C-section or cataract.

Deduction amount  

The amount of deduction that can be claimed under Section 80DDB is based on the person’s age for whom expenses are incurred. If an individual or HUF incurs medical expenses for a specific disease for a dependent or a family member, the deduction is limited to the lesser of 40,000 or the actual expenses incurred.

For this section:

• A senior citizen is defined as someone who is 60 or older at any time during the relevant year and is a resident of India.
• A very senior citizen is someone who is 80 years of age or older at any time during the relevant year and must be a resident of India.

The following table shows the amount of deduction in Section 80DDB from the assessment year 2019-2020:

Age of person receiving medical treatment	Deduction amount
60 years have not been completed	₹40000 or actual expenses, whichever is less
Senior citizens, aged 60 and up	₹100000 or actual expenses, whichever is less
Very senior citizen, aged 80 and up	₹100000 or actual expenses, whichever is less

 Methods of Obtaining a Certificate

• The certificate could be obtained from experts in specialized diseases.
•  Individuals who are getting treatment in private hospitals are not required to obtain a certificate from a government hospital.
• Individuals who are getting treatment in a government hospital must obtain a certificate from an expert who is engaged in full-time work in such a hospital. Additionally, such an expert shall have a postgraduate degree in general medicine or an equivalent degree that is acknowledged through the Medical Council of India.
• Form 10I contains no requirements.
• The certificate must contain some information, like the name of the patient, age, and name of the disease.
• The name of the specialist issuing the certificate, their qualification, registration number, address, and some other information shall be provided.
• If an individual is getting treatment in a government hospital, then in such a case, the name and address of the government hospital shall be given.

Conditions for Tax Deductions

• It is required by the taxpayer to file a hardcopy of the medical certificate, which shows the disability as issued through the central or state government medical board.
• The issuance policy should be taken in the name of the assessor, and it must be a life insurance policy and not a health insurance policy.
•  If the death is unexpected, the plan will pay a single lump sum amount as a death benefit to the disabled dependent.
•  If the disabled person died before the taxed individual, the policy amount was returned to the related person. Therefore, the refund amount is regarded as income and chargeable to tax for income tax.

Essential Documents Under Section 80DDB

The taxpayer must provide the following documents to claim a deduction under Section 80DDB:

• Medical certificate: According to the law, the taxpayer must provide a medical certificate from a certified medical practitioner revealing the disability.
• Form 10-IA: If the dependent is suffering from autism or multiple disabilities, then in such a case, this form is required to be submitted by the taxpayer.
• Self-declaration certificate: It is required by the taxpayer to file a self-declaration certificate that shows the entire expenses consisting of training and rehabilitation of the disabled have been incurred genuinely.
• Receipts for insurance premium payments: This is not a required document because all expenditures are documented in the self-declaration certificate. However, if the taxpayer is required to claim a deduction for payment for an insurance policy obtained for the disabled person, such receipts are required in such a case.

Conclusion

Financial hardship brought on by medical issues might be severe. To address this, Section 80DDB of the Income Tax Act allows for the deduction of medical expenses. This clause is particularly important since it enables senior citizens to receive a tax benefit of up to ₹ 1,00,000 and others to receive a tax benefit of ₹ 40,000 for expenses made in the treatment of certain diseases and conditions. You need to submit a prescription written by a licensed specialist to claim this benefit.

Overall, a deduction under Section 80DDB is available for medical treatment of a person or dependent who is confronting the mentioned or specified disease. Taxpayers who are facing a specified disease can inquire from Vakilsearch regarding how to obtain a certificate for claiming a deduction in Section 80DDB of the income tax return.

FAQs on Section 80DDB

Who is eligible for deduction under section 80DDB?

Individuals who are Indian citizens and Hindu Undivided Families (HUFs) are eligible for tax deduction under Section 80DDB.

What are some medical ailments specified under section 80DDB?

Section 80DD specifies medical conditions such as Parkinson's disease, haemophilia, chronic renal failure, and others.

Can malignant cancer be considered for tax deductions under section 80DDB?

Yes, individuals with malignant cancers may be eligible for tax deductions under Section 80DDB.

Is 80DDB allowed in the new tax regime?

You cannot claim any deductions, including Section 80DDB under Chapter VI A, in the new tax regime.

Is it possible to claim deduction under both Section 80DD and 80DDB?

It is not permissible to claim tax deduction under both Section 80DD and 80DDB, as per the provision in Chapter VI A.

Is it possible to claim medical bills under Section 80DDB?

It is possible for an individual to claim tax deduction for the medical expenses incurred towards the treatment of specified diseases under Section 80DDB.

Can I claim tax deduction under Section 80DDB for my father-in-law?

It is possible to claim tax deduction under Section 80DDB for your father-in-law if he is dependent on your spouse.

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