Section 80DDB of Income Tax Act: Deduction Limit, Diseases Covered & How to Claim Deduction and Certificate?

Section 80DDB of Income Tax Act allows qualified taxpayers to claim an income tax deduction for expenses incurred on the treatment of specified diseases such as cancer, AIDS, renal failure, dementia, and more. This Section 80DDB provision helps reduce annual income and overall tax obligations of the taxpayers. The deduction applies to medical expenses incurred for self, spouse, dependent children, dependent parents, and dependent siblings, subject to specific conditions and a capped deduction amount. The list of diseases covered is detailed in Rule 11DD of the Act. Taxpayers often inquire about how to claim the Sec 80DDB deduction, understand the deduction limit, and obtain the necessary certificate - all of which are essential to ensure compliance while filing an income tax return.

In this article, you will get complete details regarding 80DDB Sections, applicable 80DDB deduction limit, list of specified diseases under section 80DDB and the procedure to obtain the certificate and claim the tax deductions. 

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Section 80DDB of Income Tax Act - A Brief Overview

As mentioned, Section 80DDB of Income Tax Act provides a tax deduction to resident individuals and Hindu Undivided Families (HUFs) for expenses incurred on the medical treatment of specified diseases or ailments for themselves or their dependents, such as spouse, children, parents, or siblings. The diseases covered, which include certain cancers, neurological disorders, AIDS, chronic renal failure, and hematological disorders, are listed under Rule 11DD and require a prescription from a specialist doctor. This provision is available only to residents of India and aims to offer financial relief for the high costs associated with treating serious medical conditions. 

Who can Obtain Deductions under Sec 80DDB?

Below, we have given a eligibility criteria to claim tax deductions under Section 80DDB of income tax act:

• Deduction under 80DDB Section is available for expenses incurred on medical treatment of a dependent suffering from a specified disease (as per Rule 11DD).
• Can be claimed by:
• Individuals
• Hindu Undivided Families (HUFs)
• Not applicable to:
• Companies
• Firms
• Other non-individual entities
• A dependent includes:
• Spouse
• Children
• Parents
• Siblings
• Deduction is allowed only to Resident Indians.
• The taxpayer must have actually spent money on the treatment to claim the deduction.
• If any amount is received through health insurance or reimbursed by the employer, such amount will be deducted from the eligible deduction under Section 80DDB.

Conditions for Tax Deductions under 80DDB Section

• The taxpayers have to furnish a hard copy of the medical certificate that states the disability as issued by the Central or the State government medical board.
• The insurance plan must be in the tax assessor's name and the plan should be a life insurance policy and not a health insurance policy.
• In case of untimely death, the plan should pay the annuity or single lump sum amount as a death benefit for the disabled dependent.
• If the disabled person dies prior to the taxed individual, the policy amount is returned to the concerned person. Hence, the refund would be considered as income and therefore taxed for income tax purposes.

80DDB Deduction Limit: Amount Allowed for Deductions under Section 80DDB

If the eligibility conditions are satisfied, actual expenditure on medical treatment is tax deductible under Section 80DDB subject to the below limits. If the assessee has received any amount from an insurance or been reimbursed by an employer, that amount should be reduced from the deduction claimed. For example, if a senior citizen taxpayer spends ₹1,00,000 on treating a dependant suffering from a specified disease but receives ₹30,000 as insurance reimbursement, then the eligible deduction under Sec 80DDB would be ₹70,000

List of Diseases Covered for Deductions under Section 80DDB

Below, we have given the list of specified diseases under section 80DDB and the certificate required from a medical specialist relative to the specified diseases. 

How to Obtain the Certificate for Disease under Sec 80DDB?

To claim a deduction under Section 80DDB, a certificate confirming the disease is mandatory. Here’s how you can obtain it:

• The certificate must be obtained from a specialist doctor, as listed in the disease-specific table under Rule 11DD.
• If the patient is receiving treatment in a private hospital, they are not required to obtain the certificate from a government hospital.
• If the treatment is being done in a government hospital, the certificate must be issued by a full-time specialist working in that hospital who holds a postgraduate degree in General Medicine or an equivalent qualification recognized by the Medical Council of India (MCI).
• Form 10-I is no longer required to claim the deduction.
• The certificate should include the following details:
• Name and age of the patient
• Name of the disease or ailment
• Name, address, registration number, and qualification of the specialist issuing the certificate
• If treatment is in a government hospital, the name and address of the hospital must also be mentioned

This certificate is a crucial document and must be retained for income tax purposes and presented when requested by the assessing officer.

How to Claim Section 80DDB Deductions?

Here are the brief steps for taxpayers to claim section 80DDB Deductions:

• Choose the correct ITR form based on your income sources and eligibility (e.g., ITR-1 for salaried individuals with income up to ₹50 lakh and no business income; ITR-2 or ITR-4 for others).
• In your ITR, go to the "Deductions under Chapter VI-A" section and locate Section 80DDB.
• Enter the deduction amount (after reducing any reimbursements received) in the appropriate field for Section 80DDB.
• Ensure you have a valid prescription/certificate from a specialist as per Rule 11DD and retain all supporting documents (bills, certificate) for records.
• Complete and submit your ITR through the e-filing portal, ensuring the deduction is properly reported.

Note: Deductions under 80DDB Section are available only if you opt for the old tax regime. If you choose the new tax regime under Section 115BAC, you cannot claim this deduction.

Summary: Points to Remember while Claiming 80DDB Section Deductions

• For individual taxpayers, eligible dependents include spouse, children, parents, brothers, and sisters.
• In the case of a Hindu Undivided Family (HUF), the deduction applies to any dependent member of the family.
• It is mandatory to obtain a medical certificate from a specialist depending on the disease (e.g., neurologist, oncologist, urologist, haematologist, immunologist, etc.).
• If the taxpayer has received reimbursement from insurance or employer, the amount reimbursed must be subtracted from the eligible deduction.
• The deduction is allowed only for actual expenses incurred, and double benefit (deduction + reimbursement) is not permitted.
• The maximum deduction is ₹40,000 for regular taxpayers and ₹1,00,000 for senior and super senior citizens, as per the applicable age and financial year.

Ensure to know about the 80DDB deduction limit, obtain the certificate from the specialist and report the deduction amount properly in the ITR form to claim the deductions under Section 80DDB. 

At IndiaFilings, we help you accurately report your Section 80DDB deductions, calculate your tax liability, and file your Income Tax Return (ITR) with ease. Trust our experts to ensure compliance and maximize your tax benefits!

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Related Articles:

• Sections 80 - Income tax deductions chart
• Section 80C
• Section 80D
• Section 80U

FAQs

1. What is Section 80DDB of the Income Tax Act?

Section 80DDB allows a deduction for medical expenses incurred on specified diseases for self or dependents, subject to certain conditions and limits.

2. Who is eligible to claim a deduction under Section 80DDB?

Resident individuals and Hindu Undivided Families (HUFs) can claim this deduction if they incur medical expenses on themselves or their dependents suffering from specified diseases.

3. Who qualifies as a ‘dependent’ under Sec 80DDB?

For individuals, dependents include spouse, children, parents, and siblings. For HUFs, any member of the family is considered a dependent.

4. What is the maximum deduction allowed under Section 80DDB?

The deduction is ₹40,000 for individuals below 60 years and ₹1,00,000 for senior and super senior citizens, depending on the assessment year.

5. Which diseases are covered under Sec 80DDB of Income tax act?

Diseases listed under Rule 11DD such as cancer, AIDS, chronic renal failure, certain neurological disorders, and blood disorders like Hemophilia and Thalassemia are covered.

6. Is it necessary to get a medical certificate to claim the deduction?

Yes, a certificate from a specialist doctor (as per the disease category) is mandatory to claim the deduction.

7. Can I claim deduction under Section 80DDB if I received reimbursement from insurance or employer?

No, the amount reimbursed must be subtracted from the total medical expenses before claiming the deduction.

8. Is Form 10-I required for claiming Section 80DDB deductions?

No, Form 10-I is no longer required. Only a valid certificate from a qualified medical specialist is needed.

9. Can non-resident individuals claim deductions under Sec 80DDB of Income tax act?

No, only resident Indians are eligible to claim deductions under this section.

10. Can I claim Section 80DDB deduction under the new tax regime?

No, Section 80DDB deductions are available only under the old tax regime and not under the new regime (Section 115BAC).