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.
In this article
- What is Section 80DDB?
- Which Deductions are Included Under Section 80DDB?
- Who is Eligible to Claim Deduction Under Section 80DDB?
- Who can Issue a Certificate under Section 80DDB?
- What are the Documents Required to Claim Deductions under Section 80DDB?
- What Details Should be Present in the Prescription?
- Things to Remember About 80DDB Deductions
What is Section 80DDB?
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.
Which Deductions are Included Under Section 80DDB?
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 –
- Rs.40000 or amount paid (which of the two is less).
- Senior citizens can claim deduction up to Rs.100000 or amount paid (which of the two is less).
- Super senior citizens can claim deduction up to Rs.100000 (which of the two is less).
Who is Eligible to Claim Deduction Under Section 80DDB?
These categories below highlight which entities are eligible for deductions under Section 80DDB –
- Resident Indians
- A taxpayer who has spent income on the treatment of a dependent.
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.
Who can Issue a Certificate under Section 80DDB?
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.
What are the Documents Required to Claim Deductions under Section 80DDB?
Individuals are required to submit quite a few documents to claim 80DDB deduction. Such documents should serve as –
- Proof of treatment required
- Proof that treatment has been sought
That being said, let’s take a look at case-specific documents required to claim deductions under the said ITA section.
For Neurological diseases,
- A prescription from neurologists with a D.M. degree.
- A prescription from a specialist with another equivalent degree.
- Prescription by a specialist with a postgraduate degree in internal or general medicine degree.
- Prescription by a specialist with another equivalent degree that is acknowledged by the Medical Council of India.
For Malignant Cancer,
- Prescription extended by an oncologist with a D.M. degree in oncology.
- Prescription extended by a specialist with another equivalent degree.
For Chronic Renal Failure,
- Prescription by a nephrologist with a D.M. degree in nephrology.
- Prescription by a urologist with a Master of Surgery degree in Urology.
- A prescription from a specialist with another equivalent degree.
For Haematological disorder,
- Specialist with a D.M. degree in Haematology or another equally suitable degree.
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.
What Details Should be Present in the Prescription?
Previously, the prescriptions were submitted in Form 10-I. However, the prescriptions issued now need to specify this following information –
- Patient’s name
- Patient’s age
- Details of ailment or disease
- Doctor’s name, address and registration number
- The head of the government hospital must sign the form, or doctor in case treatment was sought at a government hospital.
- Likewise, the prescription must mention the government hospital’s name and address.
Things to Remember About 80DDB Deductions
The assessee must remember that –
- Deductions can be claimed only on the actual expenses incurred in a given financial year.
- Deductions depend on the age of the individual seeking medical attention and are not based on the age of the assessee or the claimant.
- The deduction amount under this ITA section does not include deductions claimed under other Sections mentioned in Chapter VI-A.
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.