Section 80DDB of the Income Tax Act, 1961 provides for a deduction for expenses incurred by taxpayers on the treatment of specified diseases. The deduction is available to individuals, Hindu Undivided Families (HUFs), and senior citizens. Let’s look at the key provisions of Section 80DDB in detail.
Specified Diseases
Section 80DDB allows for a deduction of up to Rs. 1,00,000 for the expenses incurred by taxpayers on the treatment of specified diseases. The following are the diseases that are eligible for claiming the deduction:
Neurological Diseases: These are diseases where the disability level has been certified to be 40% and above. The diseases that are covered under this category are Dementia, Dystonia musculorum deformans, Motor Neuron Disease, Ataxia, Chorea, Hemiballismus, and Aphasia.
Malignant Cancers: All forms of malignant cancers are eligible for claiming the deduction under Section 80DDB.
Full Blown Acquired Immuno-Deficiency Syndrome (AIDS): Taxpayers who have incurred expenses on the treatment of AIDS can claim a deduction under Section 80DDB.
Chronic Renal Failure: Taxpayers who have incurred expenses on the treatment of chronic renal failure can claim a deduction under Section 80DDB.
Hematological Disorders: Hemophilia and Thalassemia are the two hematological disorders that are eligible for claiming the deduction under Section 80DDB.
Conditions for Claiming Deduction
To claim a deduction under Section 80DDB, the taxpayer must meet the following conditions:
The expenses must be incurred for the medical treatment of the specified disease for the taxpayer or their dependents.
The taxpayer must obtain a certificate of the disease and the expenditure incurred on the treatment from a specialist doctor working in a government hospital.
The deduction can be claimed for the actual amount spent or Rs. 1,00,000, whichever is less.
The taxpayer must have incurred the expenditure during the financial year for which the deduction is being claimed.
The deduction can be claimed only by an individual or a HUF. It cannot be claimed by a company or any other entity.
The taxpayer must be an Indian resident at the time of claiming the deduction.
Benefits of Section 80DDB
Section 80DDB provides several benefits to taxpayers who have to bear the high cost of medical treatment for serious illnesses. The key benefits are as follows:
Tax Benefit: Taxpayers can claim a deduction of up to Rs. 1,00,000 for expenses incurred on the treatment of specified diseases. This reduces their taxable income and results in a lower tax liability.
Relief from Financial Burden: Medical treatment for serious illnesses can be expensive and can cause a significant financial burden on taxpayers. Section 80DDB provides relief to taxpayers by allowing them to claim a deduction for the expenses incurred on the treatment of specified diseases.
Encourages Timely Treatment: Section 80DDB encourages taxpayers to seek timely treatment for specified diseases. The deduction reduces the financial burden on taxpayers and encourages them to seek treatment without delay.
Read more useful content:
- section 145 of income tax act
- section 10e of income tax act
- section 9 of the income tax act
- section 94b of income tax act
- section 206aa of income tax act
Frequently Asked Questions (FAQs) on Section 80DDB of the Income Tax Act
Q. Who is eligible to claim a deduction under Section 80DDB?
A. Individuals, Hindu Undivided Families (HUFs), and senior citizens who have incurred expenses on the treatment of specified diseases can claim a deduction under Section 80DDB.
Q. What are the specified diseases covered under Section 80DDB?
A. The specified diseases covered under Section 80DDB are Neurological Diseases, Malignant Cancers, Full Blown Acquired Immuno-Deficiency Syndrome (AIDS), Chronic Renal Failure, and Hematological Disorders.
Q. What is the maximum deduction that can be claimed under Section 80DDB?
A. The maximum deduction that can be claimed under Section 80DDB is Rs. 1,00,000 for expenses incurred on the treatment of specified diseases.
Q. Is it necessary to obtain a certificate from a government hospital to claim a deduction under Section 80DDB?
A. Yes, it is necessary to obtain a certificate of the disease and the expenditure incurred on the treatment from a specialist doctor working in a government hospital to claim a deduction under Section 80DDB.
Q. Can the deduction be claimed for the expenses incurred on the treatment of a dependent?
A. Yes, the deduction can be claimed for the expenses incurred on the treatment of a dependent.
Q. Can the deduction be claimed for the expenses incurred outside India?
A. No, the deduction can be claimed only for the expenses incurred in India for the treatment of specified diseases.
Q. Can a company or any other entity claim a deduction under Section 80DDB?
A. No, only an individual or a HUF can claim a deduction under Section 80DDB.
