Section 80DDB of Income Tax Act: A Comprehensive Guide for AY 2021-22

The Income Tax Act, of 1961 provides several deductions and exemptions to taxpayers to reduce their tax liability. One such deduction is available under Section 80DDB of the Income Tax Act, which provides relief to taxpayers who have incurred expenses on the treatment of specified diseases for themselves or their dependents. In this article, we will discuss the provisions of Section 80DDB of the Income Tax Act, its eligibility criteria, the amount of deduction allowed, and other important aspects.

Introduction to Section 80DDB

Section 80DDB of the Income Tax Act allows taxpayers to claim a deduction for expenses incurred on the treatment of specified diseases for themselves or their dependents. The deduction is available to both individuals and Hindu Undivided Families (HUFs) and can be claimed for expenses incurred on the treatment of the taxpayer or his/her dependents.

Eligibility criteria for claiming deduction under Section 80DDB

To claim a deduction under Section 80DDB, the following conditions must be satisfied:

1. The taxpayer must be an individual or a Hindu Undivided Family (HUF).
2. The taxpayer must have incurred expenses on the treatment of a specified disease for himself/herself or his/her dependent.
3. The dependent can be the spouse, children, parents, brothers, or sisters of the taxpayer.
4. The taxpayer must obtain a certificate in Form 10-I from a neurologist, oncologist, urologist, hematologist, immunologist, or any other specialist as notified by the Central Government.
5. The certificate must contain the name, age, and address of the patient, the name of the disease, and the name, address, and registration number of the specialist issuing the certificate.

Specified diseases under Section 80DDB

The following diseases are specified under Section 80DDB to claim a deduction:

1. Neurological Diseases: Dementia, Parkinson’s Disease, Ataxia, Chorea, Motor Neuron Disease, and other specified neurodegenerative diseases.
2. Malignant Cancers: All types of malignant cancers.
3. Chronic Renal Failure: End-stage renal failure requiring regular dialysis or kidney transplantation.
4. Hematological Disorders: Hemophilia and Thalassemia.

Amount of deduction allowed under Section 80DDB

The amount of deduction allowed under Section 80DDB depends on the age of the patient and the expenses incurred on the treatment of the specified disease. The following table shows the amount of deduction allowed for different age groups:

Age of the patient Deduction allowed Below 60 years Actual expenses incurred or Rs. 40,000, whichever is lower. Above 60 years but below 80 years Actual expenses incurred or Rs. 1,00,000, whichever is lower. Above 80 years Actual expenses incurred or Rs. 1,00,000, whichever is lower.

It is important to note that the deduction can only be claimed for expenses incurred on the treatment of the specified disease and not for any other purpose.

Other important aspects of Section 80DDB

1. The deduction under Section 80DDB can be claimed in addition to other deductions available under Chapter VI-A of the Income Tax Act, such as Section 80C, Section 80CCC, Section 80CCD, etc.
2. The deduction can be claimed by the taxpayer in the year in which the expenses are incurred.
3. The deduction can be claimed by the taxpayer even if the treatment is obtained outside India.
4. The deduction cannot be claimed by the taxpayer if he/she has received reimbursement for the expenses from an insurance company or employer or any other person or authority. 5. The deduction can be claimed by the taxpayer even if he/she does not have any income from the specified disease or any other source.

Conclusion

Section 80DDB of the Income Tax Act provides relief to taxpayers who have incurred expenses on the treatment of specified diseases for themselves or their dependents. Taxpayers need to understand the eligibility criteria, the amount of deduction allowed, and other important aspects of this section to claim the deduction correctly. Taxpayers should ensure that they obtain a certificate in Form 10-I from a specialist as notified by the Central Government and keep proper records of the expenses incurred on the treatment of the specified disease to claim the deduction. Overall, Section 80DDB is a useful provision for taxpayers and can help them reduce their tax liability and manage their medical expenses.

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