Section 80DDB of the Income Tax Act, 1961 allows for a tax deduction on medical expenses incurred for the treatment of specified diseases. In this blog, we will cover the key aspects of Section 80DDB of the Income Tax Act, as applicable for the Assessment Year 2018-19.
Introduction to Section 80DDB
Section 80DDB of the Income Tax Act was introduced to provide relief to taxpayers who incur significant medical expenses for the treatment of specified diseases. The section provides for a tax deduction on medical expenses incurred for the treatment of specified diseases.
Eligibility criteria for availing deduction under Section 80DDB
To be eligible for tax deduction under Section 80DDB, the taxpayer must meet the following criteria:
- The taxpayer must be an individual or a Hindu Undivided Family (HUF)
- The taxpayer or any of his/her family members must have incurred medical expenses for the treatment of a specified disease
- The specified disease must be one of the diseases listed under Section 80DDB
Specified diseases covered under Section 80DDB
Section 80DDB covers the following diseases:
- Neurological diseases like Dementia, Parkinson’s disease, and Ataxia
- Malignant cancers
- Chronic renal failure
- Hematological disorders like Hemophilia and Thalassemia
- AIDS
Amount of deduction allowed under Section 80DDB
- The amount of deduction allowed under Section 80DDB is as follows:
- For individuals below 60 years of age, the deduction amount is up to Rs. 40,000
- For individuals above 60 years of age, the deduction amount is up to Rs. 1,00,000
- For a HUF, the deduction amount is up to Rs. 40,000
Documents required for claiming deduction under Section 80DDB
- To claim deduction under Section 80DDB, the taxpayer must submit the following documents:
- A certificate of the prescribed authority, which is a specialist doctor working in a government hospital
- A copy of the prescription for the treatment of the specified disease
Receipts or bills for the medical expenses incurred for the treatment of the specified disease
Key points to keep in mind while claiming deduction under Section 80DDB There are a few important points that taxpayers must keep in mind while claiming the deduction under Section 80DDB:
- The deduction can only be claimed for medical expenses incurred for the treatment of specified diseases, as listed under the section.
- The taxpayer must obtain a certificate of the prescribed authority, which is a specialist doctor working in a government hospital, for claiming the deduction.
- The certificate must clearly state the name of the patient, the name of the disease, and the amount of expenditure incurred for the treatment of the disease.
- The certificate must be obtained before filing the income tax return.
- The deduction can only be claimed by the person who has actually incurred the medical expenses. Therefore, if the medical expenses are reimbursed by an insurance company or an employer, the deduction cannot be claimed by the taxpayer.
- The deduction can be claimed only for expenses that have been paid out of the taxpayer’s own pocket.
Other important points related to Section 80DDB
- The deduction under Section 80DDB can be claimed in addition to other deductions, such as Section 80C, Section 80D, and Section 80G.
- The deduction can be claimed by both resident and non-resident taxpayers.
- The deduction can be claimed for medical expenses incurred for the treatment of the specified disease for the taxpayer, his/her spouse, children, parents, brothers, and sisters.
- The deduction can be claimed only for actual medical expenses incurred. Expenses incurred on travel, food, and other incidental expenses are not eligible for deduction under Section 80DDB.
Conclusion
Section 80DDB of the Income Tax Act provides an important tax relief to taxpayers who incur significant medical expenses for the treatment of specified diseases. By providing a tax deduction, the section aims to ease the financial burden on taxpayers who face such medical emergencies. However, it is important for taxpayers to ensure that they meet all the eligibility criteria and submit all the required documents in a timely and accurate manner to claim the deduction under Section 80DDB.
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)
Who is eligible to claim a deduction under Section 80DDB?
Ans: Individuals and HUFs are eligible to claim a deduction under Section 80DDB if they have incurred medical expenses for the treatment of specified diseases.
What are the specified diseases covered under Section 80DDB?
Ans: Section 80DDB covers diseases like neurological disorders, malignant cancers, chronic renal failure, hematological disorders like Hemophilia and Thalassemia, and AIDS.
What is the maximum amount of deduction that can be claimed under Section 80DDB?
Ans: The maximum amount of deduction that can be claimed under Section 80DDB is Rs. 40,000 for individuals below 60 years of age, Rs. 1,00,000 for individuals above 60 years of age, and Rs. 40,000 for HUFs.
Can a deduction be claimed for medical expenses incurred for the treatment of any disease?
Ans: No, the deduction can be claimed only for medical expenses incurred for the treatment of specified diseases, as listed under Section 80DDB.
Who can issue the certificate of the prescribed authority for claiming a deduction under Section 80DDB?
Ans: The certificate of the prescribed authority can be issued by a specialist doctor working in a government hospital.
Can the deduction under Section 80DDB be claimed by both resident and non-resident taxpayers?
Ans: Yes, the deduction can be claimed by both resident and non-resident taxpayers.
Can the deduction under Section 80DDB be claimed in addition to other deductions?
Ans: Yes, the deduction under Section 80DDB can be claimed in addition to other deductions, such as Section 80C, Section 80D, and Section 80G.
Can the deduction be claimed for medical expenses incurred on behalf of a friend or relative?
Ans: No, the deduction can be claimed only for medical expenses incurred by the taxpayer himself/herself or his/her spouse, children, parents, brothers, and sisters.
Can the deduction be claimed for expenses incurred on travel, food, and other incidental expenses?
Ans: No, the deduction can be claimed only for actual medical expenses incurred for the treatment of the specified disease.
Is it necessary to submit bills and receipts for claiming a deduction under Section 80DDB?
Ans: Yes, it is necessary to submit bills and receipts for the medical expenses incurred for the treatment of the specified disease to claim a deduction under Section 80DDB.
