Section 80DDB: Diseases Covered, Claim Deduction & Certificate

What is Section 80DDB?

Section 80DDB of the Income Tax Act allows individuals and HUFs to claim a tax deduction for medical expenses incurred on the treatment of specified diseases. These diseases, defined under Rule 11DD, include cancer, dementia, Parkinson’s disease, motor neuron disease, AIDS, and chronic renal failure.

The deduction is available only to resident taxpayers for expenses incurred on self or dependents. It is allowed on actual medical costs paid, after reducing any insurance or employer reimbursement.

Section 80DDB specifically covers treatment expenses for serious illnesses, while health insurance premiums are covered separately under Section 80D.

This provision helps reduce the financial burden of critical illnesses by offering tax relief, subject to prescribed limits and conditions.

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Section 80DDB Eligibility

The deduction u/s 80DDB for the expenditure on the medical treatment of the specified diseases can be claimed by–

• This deduction can be claimed by Individuals and HUFs only.
• It is not available to companies or any other entities.
• Only resident taxpayers are eligible to claim it.
• The deduction is allowed when expenses are incurred for the treatment of a dependent.
• Dependents include spouse, children, parents, and siblings.
• If the dependent is insured and any amount is received from insurance or reimbursed by an employer, such amount will be reduced from the eligible deduction.

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Diseases Covered Under Section 80DDB

Specified diseases covered u/s 80DDB are defined under rule 11DD of the income tax. The following diseases are covered under section 80DDB -

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How Much Deduction is Allowed Under Section 80DDB?

The deduction under Section 80DDB depends on the age of the patient and the actual medical expenses incurred. You can claim the lower of the actual amount spent or the prescribed limit.

Deduction Limits under Section 80DDB

Key Points to Remember

• Only expenses incurred during the relevant financial year can be claimed.
• The age of the patient (not the taxpayer) is considered for determining the deduction limit.
• If any amount is received from insurance or reimbursed by an employer, it must be reduced from the eligible deduction.
• You can claim this deduction only for specified diseases as prescribed under the Income Tax Act.

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How to Claim Deduction Under Section 80DDB?

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Things to Remember While Claiming Deduction Under Section 80DDB

• For individuals, dependents would mean their spouse, children, parents, and siblings. For a Hindu Undivided Family (HUF), any member of the family is a dependent.
• For claiming the deduction, the assessee needs to get a medical certificate from a specialist on the basis of the illness. This may be a neurologist, oncologist, urologist, haematologist, immunologist, or any other expert as may be applicable.
• If the assessee is reimbursed medical expenses from insurance or their employer, they cannot claim the entire deduction. The amount of deduction will be cut to match the reimbursement taken to avoid claiming both benefits on the same expenditure.
• In brief, an individual or HUF can claim up to ₹40,000 or ₹1,00,000 (as may be applicable) as deduction on medical expenses incurred on listed diseases.

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What Documents are Required to Claim Tax Deduction u/s 80DDB?

You can claim the deduction u/s 80DDB at the time of filing ITR. There should be proof that the medical treatment is actually being undertaken and a prescription/certificate from the doctor stating the person is suffering from any disease specified under Section 80DDB.

For the same reason, the prescription given by the specialist doctor is among the most important documents.

Earlier, this prescription was required to be obtained by doctors of government hospitals. However, this provision has been relaxed and prescriptions can now be obtained from the relevant specialists from a private hospital and not necessarily from a doctor in a government hospital. As per the amended Rule 11DD, the prescription can be obtained in the following manner -

• For neurological disorders, a prescription from a Neurologist with a Doctorate of Medicine in Neurology or an equivalent degree.
• For Malignant Cancer, a prescription by an Oncologist with a Doctorate of Medicine in oncology or any equivalent degree is needed.
• For AIDS, a prescription by any specialist having a PG degree in general or internal medicine or any equivalent degree.
• For Chronic Renal failure, a prescription by a Nephrologist having a Doctorate of Medicine (D.M.) in Nephrology or a Urologist having a Master of Chirurgiae (M.Ch.) in Urology or any other equivalent degree.
• For Hematological disorders, a specialist having a Doctorate of Medicine in Hematology or any equivalent degree is needed.

Thus, the prescription is required by a relevant specialist in the field of Medicine. All the degrees should be recognized by the Medical Council of India (MCI).

If the treatment is taken in a government hospital, the prescription can be obtained from any specialist working full-time with the hospital and having a postgraduate degree in general medicine.

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How to Get a Certificate/Prescription for the Disease for 80DDB Deduction?

To claim a deduction under Section 80DDB for medical treatment of specified diseases, you need to obtain a certificate from a specialist doctor. Here's the process to get a certificate for claiming the deduction:

Visit a Specialist Doctor:

Schedule an appointment with a specialist doctor who is relevant to the disease you or your dependent is suffering from. The doctor should be practicing in a government hospital.

Medical Examination and Diagnosis:

Undergo a medical examination by a specialist doctor who will diagnose the disease and prescribe the treatment.

Request for Prescription:

Request the specialist doctor to provide a detailed prescription mentioning the name and details of the patient, the disease diagnosed, and the recommended treatment. This prescription is crucial for claiming the deduction.

Prescribed Format:

The prescription should be in a prescribed format and should include the doctor's registration number, hospital details, and other relevant information.

Disability Certificate (if applicable):

In cases of neurological diseases where the disability is not less than 40%, a disability certificate issued by a prescribed medical authority is required. Ensure that this certificate is also obtained if applicable.

Keep All Medical Bills and Receipts:

Along with the prescription, keep all the bills and receipts related to the medical expenses incurred. This documentation serves as proof when claiming the deduction.

Submit the Prescription with the Income Tax Return:

At the time of income tax return e filing, provide details of the prescription and medical expenses in the relevant schedule. Keep the original prescription and other documents safe for reference and possible future audits.

No Specific Government Form:

Unlike disability certificates that may require a specific government form, the prescription itself serves as the primary document for claiming the deduction under Section 80DDB.

List of Diseases and the Experts Qualified to Issue Certificates under Section 80DDB

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How to Fill Section 80DDB Form?

To complete the Section 80DDB Form, follow these steps:

• Step 1. Provide the applicant's name.
• Step 2. Enter the applicant's father's name and address.
• Step 3. Include the name and address of the dependent person.
• Step 4. Specify the relationship between the applicant and the dependent.
• Step 5. Fill in the name of the disease according to Rule 11DD.
• Step 6. Indicate the level of disability.
• Step 7. Provide details of the government hospital, including name and address.
• Step 8. Enter the name, address, qualifications, and registration number of the treating doctor.
• Step 9. Sign the form and verify the information for accuracy.

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Difference between sections 80DD and 80DDB?

Section 80DD refers to the expenses incurred in maintaining and caretaking a dependent family member with a major disability. On the other hand, Section 80DDB refers to the expenses of medical treatment for specified diseases and medical conditions. Deductions under section 80DD could be regular, while section 80DDB deductions can be temporary.

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How to Adjust the Amount of Deduction with Any Reimbursement?

The deduction claimed under section 80DDB can be adjusted against the payments received from the insurer or the employer’s reimbursement for medical expenses. Here are some examples to help you understand better -

Example 1:

If a taxpayer incurs expenses of Rs.60,000 on the treatment of a specified disease, they can initially claim a deduction of Rs.40,000 under Section 80DDB.

However, if the taxpayer receives Rs.30,000 from an insurance company for these expenses, the amount eligible for deduction will be reduced. Thus, under Section 80DDB, the taxpayer can only claim Rs.10,000 (Rs.40,000 - Rs.30,000).

Example 2:

If the insurance company pays Rs.50,000 towards the medical expenses of Rs.60,000, which exceeds the maximum limit of Rs.40,000 under Section 80DDB, the taxpayer cannot claim any deduction under this section.

If the person receiving the treatment is a senior citizen, they are eligible for a higher deduction. For instance, the deduction allowed under Section 80DDB for senior citizens is Rs.1 lakh, which will be reduced by the amount received from the insurance company. Therefore, if Rs.50,000 is received from the insurer, the taxpayer can claim a deduction of Rs.10,000 (Rs.60,000 - Rs.50,000). i.e, Actual expenses - amount received from the insurance company).

If you or your dependents have incurred medical expenses for specified diseases, you might be eligible for substantial deductions under this provision. Our team of experts is here to guide you through the process, ensuring compliance with all regulations and helping you maximize your tax savings. Whether you need assistance filing your ITR or want to maximize your tax savings, our experts have got you covered. Book an online CA now!

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