Understanding 80DDB Disease List and Its Impact on Tax Benefits
As we all know, taxes are an integral part of our lives. It is essential to pay taxes regularly to stay clear of any legal complications or penalties. However, did you know that some medical expenses can be deducted from your taxable income? Yes, you read that right! The Indian government provides tax benefits for individuals who have incurred specific medical expenses. This tax benefit comes under Section 80DDB of the Income Tax Act.
Introduction
Section 80DDB of the Income Tax Act provides a tax deduction for individuals who have incurred medical expenses for specified diseases. The list of diseases eligible for tax deduction is issued by the Central Government and is updated each year. This article aims to give you a comprehensive understanding of the 80DDB disease list and its effect on tax benefits.
80DDB Disease List
As mentioned earlier, the list of diseases that qualify for tax benefits under Section 80DDB is released by the Central Government each year. The list for the Financial Year 2021-22 includes illnesses such as Parkinson’s disease, malignant cancers, chronic renal failure, and many more. To claim the tax deduction, an individual must provide a certificate from a specialist to authenticate the treatment of the specific disease.
Impact on Tax Benefits
The allowable deduction amount under Section 80DDB is set at INR 40,000 and can go up to INR 1 lac for senior citizens. To claim the benefit, the total expense amount incurred for medical treatments must exceed the deduction limit. It is crucial to remember that the deduction amount is deducted from the taxable income, thereby decreasing the tax liability of the individual.
Examples and Case Studies
Let’s take an example. Suppose Mr. Ramesh, a 55-year-old senior citizen, has been diagnosed with malignant cancer and has incurred expenses amounting to INR 2 lacs. He can claim this entire amount as a tax deduction under Section 80DDB. However, he cannot claim deductions for expenses amounting to less than INR 40k. By claiming this tax benefit, his taxable income will be reduced by INR 1 lac, leading to a lower tax liability.
Conclusion
To conclude, understanding the 80DDB disease list and its impact on tax benefits is essential to claim the deductions accurately. By paying attention to the list and keeping records of the expenses incurred while treating these ailments, individuals can claim the correct tax benefits eligible under this section. It is pertinent to ensure all the required documents are in place while filing income tax returns to claim these benefits.
In summary, Section 80DDB can be a great tax-saving tool for individuals who have incurred expenses treating specified diseases. By availing the deductions offered under this section, individuals can reduce their tax liabilities, providing them with much-needed relief while dealing with medical expenses.
