A resident individual is eligible for tax deduction under section 80DDB for the expenditure he has incurred for medical treatment of specified diseases.
If you are a resident individual, then as per the provisions, you can claim tax deduction for your own medical treatment and/or for the treatment of dependents.
HUF is also eligible to claim tax deduction for medical treatment of specified diseases if expenses are incurred for the medical treatment of members.
Meaning of dependent
For the purpose of section 80DDB, in case of an individual, dependent means spouse, children, parents, brothers and sisters of the individual, or any of them who is wholly or mainly dependent on the assessee for his support and maintenance.
In the case of a Hindu Undivided Family (HUF), any member can be treated as dependent if such member is wholly or mainly dependent for his support and maintenance.
|Individual assessee||Spouse, Children, Parents, Brothers and Sisters of the individual|
|HUF Assessee||Any member|
Limit of tax deduction for medical treatment of diseases
Section 80DDB allow you to claim tax deduction up to a maximum amount of Rs 40,000 for the expenses that is incurred for treatment of specified diseases of self and dependent. This means Rs. 40,000 or amount actually paid towards medical expenditure, whichever is lower will qualify for tax deduction.
If medical expenditure incurred for a dependent who is senior citizen, deduction can be claimed up to a maximum limit of Rs 60,000. This means, Rs 60,000 or amount actually paid towards medical treatment, whichever is lower will be allowed as tax deduction under section 80DDB.
Senior citizen means, any individual resident in India who is of the age of 60 years or more at any time during the previous year.
Similarly, if the medical expenditure incurred for a very senior citizen then maximum deduction limit is up to Rs. 80,000 i.e. Rs. 80,000 or amount incurred whichever is lower will be allowed as tax deduction. Very senior citizen means a resident individual who is 80 years or more at anytime during the previous year.
|Expenditure incurred for a dependent||Maximum allowed deduction (Amount in Rs.)|
|Individual who is not a senior citizen (age less than 60 years)||40,000|
|Senior citizen (age 60 years or above)||60,000|
|Very senior citizen (age 80 years or above)||80,000|
|Note: if expenses are less than the maximum allowed deduction as mentioned in colum number 2, deduction will be restricted up to the amount spent or paid.|
The amount of tax deduction under section 80DDB is actually based on the age of the person availing medical treatment and not on the basis of the age of the assessee who is claiming tax deduction.
After calculating tax deduction amount as discussed above, you are required to adjust it by the amount received from the insurer against any insurance for the medical treatment or as may be reimbursed by the employer.
What are the diseases covered U/S 80DDB for tax deduction
Specified diseases are specified under rule 1DD to qualify for tax deduction under section 80DDB. Following diseases will be eligible for the purpose of this section;
- Neurological diseases
- Full Blown Acquired Immuno-Deficiency Syndrome (AIDS)
- Chronic Renal failure
- Haemophilia and
To claim tax deduction assessee is required to obtain a certificate from a doctor with relevant doctorate of medicine degree recognized by the medical council of India.
|Type of diseases||Certificate to be issued by||Conditions|
|Neurological||Neurologist with a DM degree in Neurology or any equivalent degree||Must be recognised by the Medical Council of India (MCI)|
|Cancer||Oncologist with a DM degree in Oncology or any equivalent degree|
|Chronic Renal failure||Nephrologists with a DM degree in Nephrology or a Urologist having a Master of Chirurgiae(M.Ch.) degree in Urology or any equivalent degree|
|AIDS||Specialist having a post-graduate degree in General or Internal Medicine or any equivalent degree|
|Hematological disorders (i.e.Haemophilia and Thalassaemia)||Specialist having a DM degree in Hematology or any equivalent degree|
If the treatment is in a Government hospital, certificate may be issued by any specialist working full-time in that hospital and having a post- graduate degree in General or Internal Medicine or any equivalent degree, which is recognized by the MCI.
Certificate issued should contain Name, Age, type of disease and details like name, address, registration number and the qualification of the specialist issuing the prescription. If the treatment is being received in a government hospital, name and address of the government hospital should be mentioned.
Now you know Who can claim deduction under section 80DDB? What is 80DDB deduction in income tax? and what is the limit of 80DDB? Let us know the applicability with following example.
Mr X, an individual, resident in India, paid expense on medical treatment of specified disease of Rs 60,000 during the financial year 2018-2019. He also received an amount of Rs 30,000 from an insurance company against such expenses. Can he claim tax deduction under section 80DDB? If, yes calculate his tax deduction for the assessment year 2018-2019.
|Particulars||Amount (in Rs.)|
|Medical expenditure expenses paid by assessee||60,000|
|Maximum Limit of section 80DDB (assuming Mr C not a senior citizen)||40,000|
|Tax Deduction Eligibility (Lower of above two)||40,000|
|Less: amount received from insurance company||(30,000)|
|Deduction can be claimed u/s 80DDB (Rs 40,000 – Rs 30,000)||10,000|
In the above example Mr X eligibility was Rs 40,000 to claim tax deduction under section 80DDB. As he has received Rs 30,000 from insurer towards his medical treatment, total eligibility gets reduced by the amount received to Rs 10000 (Rs 40,000-Rs 30,000). Hence, the assessee can claim an amount of Rs 10,000 as tax deduction under section 80DDB of Income Tax Act 1961.