Who is eligible to get a deduction from Section 80DDB?

The following entities can claim a deduction from their income tax from Section 80 DDB:

  • By individuals and HUFs (Hindu Undivided Family)
  • No deduction claimed by the likes of corporate officials.
  • The assessee should be a resident of India during the relevant immediately previous year. Non-resident individuals are totally ineligible for the benefits of this section.
  • It is an imperative term that the deduction should be claimed only by the person who has incurred the said expenses for the medical treatment.
  • The dependant should imply spouses, children, parents and siblings only.
  • In the case when the dependant is already insured by any agency or company and some payment is received by the reimbursement from this employer- the insurance amount must be subtracted from the deduction.

What are the main features of deduction under Section 80DDB?

The following are some points of concern while claiming the deduction under Section 80DDB-

  • The deduction must be claimed by the eligible candidates as described above.
  • The deduction is only available with respect to the amount actually being paid by the respective taxpayer on the medical treatment of any of the enlisted ailments as prescribed by the Board.
  • The taxpayer must obtain the prescription from the concerned medical treatment from the specialist as prescribed for it, be it a neurologist, a urologist, a haematologist, an immunologist or an oncologist.
  • Any of medical expenditure if reimbursed by any insurer or any employer, the amount must be deducted from the amount eligible for the deduction.
  • The deduction can be claimed by filling up a Form 10-1 from a specialist doctor who confirms the treatment of the disease. While only specialists from government hospitals were required for the same till A.Y. 2015-16, any specialist doctor can do the same since A.Y. 2016-17.

What amount can be allowed for deduction under Section 80DDB?

The age of the person requiring medical treatment is an important factor in determining the amount that can be claimed for deduction under Section 80DDB. The amount is capped at the:

  • Actual amount being paid for the treatment
  • or the sum of INR 40,000 –

whichever amount is less in the case where the medical treatment expense is incurred for an individual or his dependant or a member of a HUF.

In the case that the respective patient is a senior citizen or very senior citizen, the amount of the deduction is :

  • The actual amount required for treatment
  • or the maximum sum of INR 1 lakh, whichever is less.

One may note the following points to note in this context-

  • The deductions are always claimed with respect to the actual expenses incurred during the relevant previous year and the patient’s age.
  • The amount of the deduction is strictly based on the age of the person availing the medical treatment and not on the age of the person claiming the deduction.
  • Insurance amount received (if any) reimbursed by an employer for the medical treatment of employee is to be reduced from actual expenses incurred.

What are the medical conditions allowed for the deduction under Section 80DDB?

The following medical conditions are the cases for which one can claim deductions as per the expenses of the treatment. These are highly specified diseases and one needs the prescription of the respective specialists in order to confirm them-

  • Acquired Immuno Deficiency Syndrome (AIDS)
  • Aphasia
  • Ataxia
  • Chorea
  • Dementia
  • Dystonia musculorum deformans
  • Hemiballismus
  • Haematological disorders
  • Haemophilia
  • Malignant cancers
  • Motor neuron disease
  • Parkinson’s disease
  • Renal failure
  • Thalassaemia

As one may notice, there are five broad categories of diseases- malignant cancers, AIDS, Chronic renal failure, Haematological disorders and Neurological diseases. The section mainly intends to cover these major illnesses and doesn’t offer to cover the expenses of the more common diseases like cataract or C-section.


Documents essential to claim deduction under 80DDB

To claim the deduction under Section 80DDB, the prescription given by the specialist doctor is among the most important documents. This should be proof that the medical treatment is actually being undertaken for which a certain amount if required. Earlier, a government doctor was required for this proof, but now this bar has been removed. With effect from AY 2016-17, any qualified doctor can provide the document. He or she can be a doctor in a private hospital or a government hospital. The Rule 11D states the specifics of the prescription required as follows:

  • In the case of neurological diseases, the prescription is required from a Neurologist having a Doctorate of Medicine in Neurology or any equivalent degree.
  • In the case of Malignant Cancer, the prescription is required by an Oncologist having a Doctorate of Medicine in Oncology or any equivalent degree.
  • In the case of Chronic Renal Failure, the prescription is required by a Nephrologist having a Doctor of Medicine in Nephrology or else a Urologist having a Master of Chirurgiae (M.Ch.) degree in Urology, or any equivalent degree
  • In the case of AIDS, the prescription is required from any specialist having a postgraduate degree in general medicine or internal medicine or any equivalent degree.
  • In the case of any Haematological disorder, a prescription is required from a specialist having a Doctorate of Medicine in Haematology or any equivalent degree.

The degrees must necessarily be recognized by the Medical Council of India (MDI). If the treatment is undertaken in a government hospital itself, the prescription can easily be obtained from any of the specialists working full time with the hospital and having a postgraduate degree in general medicine.


Prescription Format

While it is a must that the prescription be from the qualified specialists of the relevant field, the content of the prescriptions should strictly follow the assigned format. Earlier, Form 10-I was required for the same but that has been turned down since AY 2016-17. In the present case, the following parameters are a must to be specified in the prescription.

  • Name of the Patient
  • Age of the Patient
  • Name of Disease or Ailment
  • The specialist doctor issuing the prescription must specify his/her name, address, and registration number.
  • In the case that the treatment is being undertaken in a government hospital, the name and address of the government hospital must be mentioned.
  • The form must be signed by the head doctor in the hospital as per the case.

This prescription form is submitted to the income tax department while filing the income tax return.


How can one fill the Section 80DDB Form?

The following steps must be followed while filling the Form 10-I to avail the deduction under Section 80 DDB-

  • Fill in the name of the applicant.
  • Enter the address and the father’s name of the applicant.
  • The name and address of the person the applicant is dependent upon and their relationship.
  • One must check the rule 11DD while filling the column of the name of disease or ailments.
  • One must mention whether the disability is 40% or more to help classify it into minor or major disability.
  • The name, address, registration number and qualification status of the specialist involved must be mentioned along with the name and address of the hospital if it’s run by the government.
  • Fill up the verification section carefully and put your signature stating that the information provided is all correct.

Conclusion

Section 80 DDB is a very important section in the Income Tax Act meant to help the diseased with their ailments. One must take care of the specialist involved in order to produce an affirmed prescription. All the steps have been mentioned must be taken care of to avoid a rejection of the deduction in tax. Medical impairments are often crippling for almost a person’s lifetime and among several factors that can increase the problems, one of them is the economic situation of the person. Thereby, it’s important to have the government’s hand in case of such major diseases which take time and immense care to heal.

CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2Win.in. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.