The Income Tax Act, 1961, enables eligible taxpayers to claim deductions on their yearly income, through which they can reduce their tax liabilities to a certain degree. Section 80DDB under the ITA puts forth certain provisions which permit eligible taxpayers to claim specific benefits and helps them to save on taxes annually.
Under the Income Tax Act, Section 80DDB comprises tax exemptions on expenses incurred by an individual towards the treatment of specific diseases. It must be noted that one cannot claim deductions under this section against long-term or short-term capital gains mentioned under section 111A, income from winning lotteries, horse races or other earnings mentioned in Section 115BB. Also, income mentioned under Sections – 115A, 115AB, 115AC, 115AD, 115D and 115BBA are also debarred from deductions.
Section 80DDB of Income Tax Act covers deductions on expenses incurred while availing medical treatment for specific ailments or disorders. It states that if an individual or HUF has incurred expenses for seeking medical assistance for diseases, such costs come under the purview of deductions.
Regardless, it must be noted that such deductions are subject to terms and conditions and are capped at specified limits under Section 80DDB of ITA. Notably, expenses are limited to diseases and ailments. They should not be confused with the premium paid for health insurance policies, as such pay-out is covered under Section 80D of ITA.
For the assessment year of 2019-20, the amount allowed under Section 80DDB income tax deductions is discussed below –
These categories below highlight which entities are eligible for deductions under Section 80DDB –
It must be noted that here, dependant implies – parents, siblings, children and spouse. If a dependant is insured and has received payment from insurers or an employer, it shall be subtracted from deductions.
Individuals who meet the criteria mentioned in this table can issue certificates under Section 80DDB –
|S.N.||Disorders Included||Issuers of Certificate Under Section 80DDB deduction|
|1.||Neurological diseases where disability level is 40% or more.
Typically, such disorders include –
|Neurologists with a Doctorate of Medicine degree in Neurology.
Specialist with an equivalent degree recognised by the Medical Council of India.
|2.||Acquired Immuno Deficiency Syndrome (AIDS)||Specialists with a postgraduate degree in internal or general medicine or another equivalent degree.|
|3.||Haematological disorders like –
||Specialist with a Doctorate of Medicine degree in Haematology.
Specialist with an equivalent degree that is recognised by the Indian Medical Council.
|4.||Malignant Cancer||Oncologists with a Doctorate of Medicine degree in Oncology.
Specialist with an equivalent degree recognised by the Medical Council in India.
|5.||Chronic Renal Failure||Urologists with a Master of Surgery degree in urology.
Nephrologists with a Doctorate of Medicine Degree in nephrology.
Specialists with an equivalent degree recognised by the Indian Medical Council.
Individuals are required to submit quite a few documents to claim 80DDB deduction. Such documents should serve as –
That being said, let’s take a look at case-specific documents required to claim deductions under the said ITA section.
For Neurological diseases,
For Malignant Cancer,
For Chronic Renal Failure,
For Haematological disorder,
Notably, the degree of the specialist must be acknowledged and approved by the Medical Council of India. The prescription must be obtained from any specialist who works full-time at a government hospital and has a valid postgraduate degree in the field of general medicine.
To be considered as a valid proof, the prescription must contain details of the patient and his/her ailment. Also, one must submit the prescription to the Income Tax department to move forward with the process of claiming 80DDB deduction.
Previously, the prescriptions were submitted in Form 10-I. However, the prescriptions issued now need to specify this following information –
The assessee must remember that –
It is crucial for taxpayers to ensure that they look into these details under Sec 80DDB of Income Tax Act before they claim their deductions. Since there are several specifications, claiming under this particular Section can be difficult without adequate information.