Section 80DDB: Tax deduction on medical expense

Salaried individuals and pensioners who have undergone treatment for certain critical illnesses can claim tax deductions against the medical expense under Section 80DDB of the income tax law. In this guide, we explain the various aspects of this section.

 

See also: Section 80E: Tax deduction against education loan interest payment

 

What is Section 80DDB?

Under Chapter VI A of the Income Tax Act, 1961, deductions made available to taxpayers is listed from Sections 80C to 80U. Section 80DDB of the income tax act talks about the deduction offered against medical expenses for specific diseases for individuals and Hindu Undivided Families (HUF).

Note that Section 80DDB does not offer deductions for the premium paid for health insurance policies that cover critical diseases mentioned in this section. The payment for health insurance is covered under Section 80D.

 

Who can claim a deduction under Section 80DDB?

Only for individuals and HUFs: Section 80DDB is meant only for individuals and HUFs. Companies and other entities cannot claim deductions under this section.

The deduction can be claimed only by the individual (including dependents) or the HUF (including all the members) who has paid for the medical expense.

Only for resident Indians: Only a resident Indian is eligible to claim deductions under this section.

 

What diseases are covered under Section 80DDB?

Rule 11DD of the income tax law mentions specific illnesses for which deduction can be claimed under Section 80DD. These include:

• Neurological diseases where the disability level has been certified to be 40% and above, including:
• Dementia,
• Dystonia Musculorum Deformans
• Motor Neuron Disease
• Ataxia
• Chorea
• Hemiballismus
• Aphasia
• Parkinson’s Disease
• Malignant cancers
• Full-blown acquired immuno-deficiency syndrome
• Chronic renal failure
• Haematological disorders
• Haemophilia
• Thalassemia

 

Section 80DDB: Deduction limit

Taxpayer’s age	Deduction limit
Below 60 years	Rs 40,000 or actual expenses, whichever is less
60 years and above	Rs 1 lakh or actual expenses, whichever is less
80 years and above	Rs 1 lakh or actual expenses, whichever is less

 

In budget 2018, the then finance minister Arun Jaitley increased the deduction limit for senior citizens and super senior citizens to Rs 1 lakh from the previous Rs 60,000 and Rs 80,000, respectively. However, the deduction can be claimed only for the actual expenses incurred during the previous year.

 

Can Section 80DDB deduction be claimed if your medical insurance covers the expenses?

No, the amount of deduction does not get adjusted against medical insurance coverage. Suppose a senior citizen spends Rs 1.50 lakh for treatment of a critical illness mentioned in the list. He will be able to claim the full Section 80DDB deduction of Rs 1 lakh only if the medical insurance does not cover this expense.

Suppose the insurance company covers Rs 50,000 of this expense, the taxpayer will be able to claim a deduction of the remaining Rs 50,000 under Section 80DDB.

More importantly, the taxpayer will not be able to claim any deduction under Section 80DDB if the amount received from the insurance company is higher than the permissible limit. If the company pays the taxpayer Rs 1.20 lakh as coverage, he will not be able to claim any deduction.

 

What proof do you have to submit to claim the deduction?

Those planning to claim tax deduction under this section have to provide the following documents as proof:

• For mental disorders, a certificate from a neurologist having a doctorate of medicine degree in neurology or any equivalent degree, recognised by the Medical Council of India (MCI)

• For cancer, a certificate from an oncologist with a doctorate of medicine degree in oncology or any equivalent degree, recognised by the MCI

• For AIDS, a certificate from any specialist with a post-graduate degree in general or internal medicine or any equivalent degree, recognised by the MCI

• For chronic renal failure, a certificate from a nephrologist with a doctorate of medicine degree in nephrology or a urologist with a master of chirurgical degree in urology or any equivalent degree, recognised by the MCI

• For haematological disorders, a certificate from a specialist with a doctorate of medicine degree in haematology or any equivalent degree recognised by the MCI

 

Details on the prescription

• Name of the patient
• Age of the patient
• Name of the disease
• Name of the specialist issuing the prescription
• Address of the specialist issuing the prescription
• Registration number of the specialist issuing the prescription
• Qualification of the specialist issuing the prescription
• Name and address of the government hospital (if the patient is receiving treatment in a government hospital)

The taxpayer must attach these documents with the Income Tax Return form.

 

FAQs

Who can claim deductions under Section 80DDB of the income tax act?

Individuals and Hindu Undivided Families can claim deductions under Section 80DDB of the income tax act.

Can NRIs claim Section 80DDB deduction?

No, NRIs cannot claim Section 80DDB deduction. It is only meant for resident Indians.

Will I have to provide proof of expense?

Yes, to claim a deduction under Section 80DDB, the taxpayer must provide proof of the need for treatment and the actual treatment.

Who can issue a prescription?

The prescription needs to be obtained from qualified doctors with relevant specialisation.

Which form is used to give the prescription?

Earlier, the prescription had to be submitted in Form 10-I. That condition was done away with in 2016-17.