Understanding 80DDB: Medical Treatment of Specified Diseases
Introduction
When it comes to healthcare expenses, things can get out of hand quickly. Even with medical insurance, certain treatments or procedures are not covered, resulting in a significant financial burden on patients and their families. However, the government of India has provisions to provide some relief to those undergoing significant medical expenses. One such provision is under Section 80DDB of the Income Tax Act, which deals with the medical treatment of patients suffering from specified diseases. In this article, we will understand what 80DDB is and how it can be helpful for patients.
What is Section 80DDB?
Section 80DDB of the Income Tax Act provides tax deductions to individuals who have incurred expenses on the treatment of specified diseases. To qualify for this deduction, the individual must be an individual taxpayer who has undergone treatment or incurred expenses for themselves or their dependent for the treatment of specified diseases such as Parkinson’s, Malignant Cancers, Hematological Diseases, and Chronic Renal Failure, among others.
Deduction Available under Section 80DDB
Taxpayers can avail of deductions of up to INR 40,000 or actual treatment expenses, whichever is less, under Section 80DDB. For senior citizens, the deduction limit is increased to INR 1,00,000. It is important to note that the deductions are not available for reimbursement from an insurance policy or the employer. Hence, deductions are only available for expenses incurred by the individual or their dependent.
Steps to Claim Deductions under Section 80DDB
To claim deductions under Section 80DDB, the individual taxpayer must follow a few simple steps:
1. Obtain a prescription for the treatment of a specified disease from a specialist doctor.
2. Obtain a certificate in Form 10-I from the doctor confirming the treatment and amount spent on the treatment.
3. Furnish the certificate obtained in Form 10-I while filing the income tax return.
4. Keep all the relevant receipts and bills of the medical expenses incurred safely.
Conclusion
In conclusion, Section 80DDB is a boon for taxpayers who have incurred significant medical expenses for the treatment of specified diseases. The deduction can help relieve some of the financial burden on the patient and their families by reducing the tax liability. To claim the deduction, the taxpayer must fulfill the eligibility criteria and follow the steps outlined in the Income Tax Act. Understanding the provisions of 80DDB and utilizing them for tax savings can be extremely beneficial for individuals suffering from specified diseases and their families.
Examples:
1. Mr. Sharma incurred INR 60,000 on the treatment of his wife’s chronic renal failure. He can claim a deduction of INR 40,000 under Section 80DDB.
2. Ms. Verma incurred INR 1,20,000 on the treatment of her father’s malignant cancer. As her father is a senior citizen, she can claim a deduction of INR 1,00,000 under Section 80DDB.
