Section 80DDB of the Income Tax Act provides tax benefits to individuals and Hindu Undivided Families (HUFs) for medical expenses incurred on specified serious diseases. This provision reduces the financial burden on taxpayers facing high healthcare costs.
Understanding the eligibility criteria, covered ailments and the claim process under Section 80DDB can help taxpayers maximise their deductions and ease medical expenses.
What is section 80DDB?
It is a tax benefit under the Income Tax Act, 1961. The deduction under section 80DDB allows individuals and Hindu Undivided Families (HUFs) to claim relief on medical expenses for certain serious diseases. These include cancer, kidney disease, Parkinson's and other specified illnesses. The taxpayer and their dependents can claim the rebate if they meet the eligibility criteria and provide a valid medical certificate.
Deduction allowed under section 80DDB
Under section 80DDB, benefit for senior citizens (60+ years) allow a tax deduction of up to INR 1,00,000 on medical expenses for specified diseases. For younger people, the 80ddb deduction limit is INR 40,000.
Eligibility criteria under section 80DDB
Here are the conditions for 80DDB tax benefit eligibility:
- The claimant must be an individual taxpayer or belong to Hindu Undivided Families (HUF).
- Deduction will apply to medical expenses for a dependent suffering from a specified disease, such as cancer, kidney disease or Parkinson's.
- Eligible dependants for individuals include spouses, children, parents or siblings.
List of diseases covered u/s 80DDB
Here is the 80ddb deduction diseases list
- Neurological (disability at least 40%):
- Dementia
- Dystonia Musculorum Deformans
- Motor Neuron Disease
- Ataxia
- Chorea
- Hemiballismus
- Aphasia
- Parkinson's Disease
- Malignant cancers
- Full Blown Acquired Immuno-Deficiency Syndrome (AIDS)
- Chronic Renal failure
- Hematological disorders, such as:
How to claim deductions under section 80DDB of income tax act?
Here are the steps to claim the income tax rebate under section 80DDB:
- Obtain a medical certificate from a specialist.
- Ensure the certificate mentions the disease name, treatment details, and doctor's credentials.
- Keep all medical expense receipts and bills for record purposes.
- Deduct the reimbursement amount received from any insurer or employer before filing the tax return.
- Submit the necessary documents while filing your Income Tax Return (ITR).
What documents are required for section 80DDB?
Documents required for claiming rebate under section 80ddb of income tax act:
- Medical certificate from a specialist
- Prescriptions and medical reports for treatment verification
- Expense proof such as hospital bills, medicine invoices, and doctor consultation fees
- Insurance reimbursement statement (if applicable)
How to obtain the certificate for the disease for section 80DDB deduction?
To obtain the necessary certificate for diseases covered under 80ddb, the claimant must contact a doctor to confirm the diagnosis of the specified disease. The medical professional will issue a certificate with the patient's name and other essential details.
What should be mentioned in the 80DDB certificate?
The medical certificate should contain the following details:
- Patient's name and age
- Disease name and its severity
- Specialist doctor's name, qualifications, and registration number
- Hospital details and issuing authority signature
Things to remember while claiming deduction under section 80DDB
Here are a few important things to remember when filing for 80DDB:
- Ensure that the disease qualifies for deductions under the specified list
- The deduction amount should adjusted based on the reimbursement
- Maintain all medical records and receipts for verification.
- A specialist must issue a medical certificate from a government hospital.
- The deduction amount varies based on the age of the taxpayer.
FAQs
- Can we claim a deduction under Section 80DDB if I have a medical insurance policy?
Yes, deductions under Section 80DDB are claimed even if one has health insurance plans.
- Can I claim the benefit of Section 80DDB for my spouse and parents?
You can claim deductions under section 80DDB on medical expenses incurred for self, spouse, children, and senior citizen health insurance.
Conclusion
80DDB medical treatment for critical illness provides immense relief to taxpayers by allowing deductions on medical expenses incurred for treating diseases.
However, relying solely on tax deductions may not be enough to manage high healthcare costs. Comprehensive health insurance plans can offer additional financial protection by covering hospitalisation expenses, treatments and medications exempted from tax benefits.
Investing in senior citizen health insurance can help cover rising medical expenses. These plans provide extensive coverage for age-related illnesses, pre-existing conditions and long-term treatments, ensuring financial security for elderly family members.
By combining tax deductions with a well-structured insurance plan, taxpayers can secure their finances and health against unforeseen medical emergencies.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It is not intended as a substitute for professional advice, diagnosis, or treatment. Please consult your general physician or another certified medical professional for any questions regarding a medical condition. Relying on any information provided in this blog is solely at your own risk, and ICICI Lombard is not responsible for any effects or consequences resulting from the use of the information shared.