Tax benefits play a crucial role in financial planning. The Indian Income Tax Act provides deductions under various sections to ease taxpayers' financial burdens. Two important provisions, Section 80DD and Section 80DDB, offer deductions for medical expenses. While both sections focus on healthcare costs, they differ in purpose, eligibility, and deduction limits. In this blog, let us look at the difference between 80DD and 80DDB.
What is Section 80DD of Income Tax Act?
Section 80ddb of Income Tax Act provides tax deductions to individuals or Hindu Undivided Families (HUFs) who incur expenses for the medical care of a disabled dependent. This includes expenditures for nursing, rehabilitation, training, and insurance policies designed for the dependent's welfare.
Covered disabilities
- Mental illnesses and neurological disorders (Autism, Cerebral Palsy, Parkinson'sParkinson's Disease).
- Visual impairments (Blindness, Low Vision).
- Locomotor disabilities.
- Hearing impairments.
What is Section 80DDB of Income Tax Act?
Section 80dd of Income Tax Act allows tax deductions for individuals and HUFs who incur medical expenses for themselves or dependents suffering from specified diseases. This section helps those dealing with high treatment costs for critical illnesses.
Covered diseases
- Neurological diseases (Dementia, Parkinson's, etc.)
- Malignant Cancers
- AIDS
- Chronic Kidney Failure
- Haematological disorders (Haemophilia, Thalassemia)
Difference between 80DD and 80DDB
80DD vs 80DDB provide tax relief for medical expenses, but they differ in their scope and applicability.
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Feature
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Section 80DD
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Section 80DDB
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Purpose
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Covers expenses for dependents with disabilities
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Covers treatment costs for specified diseases
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Who can claim?
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Individual or HUF with a disabled dependent
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Individual or HUF paying for medical treatment
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Deduction amount
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₹75,000 (40%-80% disability) ₹1,25,000 (80%+)
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₹40,000 (below 60 years) ₹1,00,000 (60+ years)
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Medical certificate
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Yes, from a government hospital
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Yes, from a specialist doctor
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Insurance impact
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Not affected by insurance
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Deduction reduced if expenses are reimbursed
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Conclusion
Sections 80DD and 80DDB provide valuable tax benefits for medical expenses. If you are supporting a disabled dependent, section 80DD helps cover medical and rehabilitation costs. If you or your family members need treatment for critical illnesses, section 80DDB offers tax relief.
While these deductions reduce tax liability, medical expenses can still be overwhelming, especially for serious illnesses or long-term treatments. This is where comprehensive health insurance plans become essential. Thus, a good policy ensures financial protection, access to quality treatment and reduced out-of-pocket expenses.
For senior citizens, healthcare costs can be even higher due to age-related illnesses. Moreover, a senior citizen health insurance policy provides cashless hospitalisation, coverage for critical illnesses, and higher sum insured options.
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 a certified medical and/or nutrition professional for any questions. 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.