Section 80DDB of Income Tax Act speaks of tax deductions for individuals and HUF in respect of medical expenses incurred for the treatment of specified diseases or ailments. This section speaks of medical costs incurred on the treatment of specific diseases or illnesses, which shouldn't be confused with the premium amount paid to buy a health insurance policy, covering such diseases or ailments. The premium paid for a health insurance policy is included under Section 80D of the Income Tax Act.
Who can claim under Section 80DDB?
Only individuals and HUFs can avail tax deductions under Section 80DDB. Also, the tax deduction can only be claimed by the assessee who is resident Indian during the relevant previous year. Any non-resident Indians can not avail of the benefits of this section. Also, corporate or any other entity cannot claim any deduction under section 80DDB.
Additionally, it is essential to know that the deduction can only be claimed by the person who actually took the expenses. Therefore, under Section 80DDB, the tax claim can be made by the individual and HUF who have incurred those medical costs.
Which diseases or illnesses are specified under section 80DDB?
Diseases or ailments specified under Section 80DDB are as follows-
- Neurological diseases, with disability level of 40% and more and covers Chorea, Motor Neuron Disease, Dementia, Ataxia, Aphasia, Parkinson's Disease Dystonia Musculorum Deformans, and Hemiballismus
- AIDS- Acquired Immuno-Deficiency Syndrome
- Malignant Cancer
- Chronic Renal failure
- Hematological disorders like Hemophilia or Thalassaemia.
To avail tax benefits under Section 80DDB, the assessee must provide proof of the need of the medical treatment along with a proof showing that the treatment has been undertaken. Hence, you should certainly get a prescription from a qualified and verified doctor.
Earlier it was required to get such medical prescription from doctors practicing in a government hospital. Despite this, the same has been relaxed by the government from AY 2016-17. Now, you can obtain a prescription from a relevant specialist from private hospitals and not essentially a doctor working with a government hospital.
How much amount can be claimed as deduction under section 80DDB ?
The amount that can be claimed as tax deduction under section 80DDB is based on the age of the person for whom the medical expense/treatment is incurred. The tax deduction limit was revised by the Government of India in Union Budget 2019 for AY 2019-20. Following are the new deduction limits:
|Age of person who underwent treatment||Deduction allowed to assessee|
|Up to 60 years||Least of actual amount spent or Rs 40,000|
|Senior citizen (60-80 years)||Least of actual amount spent or Rs 1,00,000|
|Super senior citizen (above 80 years)||Least of actual amount spent or Rs 1,00,000|
All in all, the Section 80DDB of the Income Tax of India offers tax deduction benefits to Individuals and HUFs for medical expenses incurred for treatment of specific diseases or ailments. Although the section offers tax relief, it is always an ideal step to buy a health insurance policy. You can easily buy health insurance online without any hassle.
You can also go through the income tax saving guide to understand the relation between health insurance and income tax.