The recent global healthcare crisis has increased people's dependence on healthcare insurance to save significantly on rising medical costs. However, individuals unable to afford regular healthcare insurance premiums can save on their tax liability instead via Section 80DDB of the IT Act. Under this, you can enjoy an 80DDB deduction on medical expenses incurred on your dependent or yourself.

Sounds good?

Now that you know what 80DDB in Income Tax is, let's talk about eligibility, claim process, and other factors to help you understand better.

Take a look at other 80DDB eligibility criteria to claim tax benefits -

• Only individuals and Hindu Undivided Families (HUF) qualify for tax benefits.
• Indian citizenship is a must. Any non-residents of India cannot enjoy these tax benefits. Also, any corporate businesses do not qualify for a deduction on income tax returns.
• You are an eligible taxpayer and have incurred medical expenses on diseases of your dependent.
• Here, dependents can be your spouse, children, siblings or parents. You can claim a deduction on your medical expenses as well.

Take a look at the specified diseases under section 80DDB of Income Tax Act mentioned below -

Neurological Diseases

This deduction covers patients suffering from 40% neurological disability. Diseases include -

• Ataxia
• Parkinson's Disease
• Motor Neuron Disease
• Dementia
• Hemiballismus
• Chorea
• Dystonia Musculorum Deformans
• Aphasia

Other diseases include

• Severe Renal failure
• Cancer
• Thalassaemia
• Haemophilia
• AIDS

Note the following pointers on how to claim tax benefits under 80DDB:

3 Factors to Consider Before Availing 80DDB Deduction

To claim your tax deduction, first consider these pointers:

• As an eligible taxpayer, you need to provide a hard copy of a medical certificate. The Central or State government medical board must issue the medical certificate stating the disease.
• The life insurance policy must be under the tax assessor’s name. Also, remember that this insurance policy is not health insurance. This pays the annuity in case of a tax assessor's sudden demise. This lump sum amount serves as a death benefit for the dependent.
• In case of the demise of a disabled dependent before taxation, the policy amount is returned to the assessor. This amount is treated as income and hence taxed accordingly.

1. Medical Certificate

As a taxpayer, you need to submit a medical certificate issued by an authorised medical practitioner to the Income Tax Department while filing your tax return. This serves as proof for medical treatment or the treatment that has been performed.

Also, 2 things to remember:

• Person Receiving Treatment at a Private Hospital

In this case, he/she may collect the certificate from the same hospital. Therefore, he does not have to collect the same from a government hospital as instructed earlier.

• Person Receiving Treatment from Government Hospital

He/she must collect a medical certificate from a full-time working medical practitioner.

2. Self-Declaration Document

You need to showcase a self-declaration certificate. This serves as proof of the medical expenses you have incurred. Hence, this document must include all the medical expenses, including training and rehabilitation of the disabled dependent.

3. 80DDB Form

According to the new rule, you don't need to submit the prescription and Form 10-1.

But, it is essential in case a dependent suffers from disabilities such as Autism and Cerebral Palsy.

4. Paid Insurance Premium Receipts

You must submit your paid insurance premium receipts for tax exemption under section 80DDB against an insurance policy.

Follow the step-wise guide to fill up the 80DDB Form:

• Step 1: Fill in the patient's name, address, father's name.
• Step 2: Write the name and the person's address and relationship with the patient on whom the person is dependent. 
• Step 3: Mention the name of the disease. Also, specify the extent of the disability (For example, 40% or more).
• Step 4: Fill in the name, address, registration and qualification of the doctor issuing the medical certificate. Mention the name and address of the hospital.
• Step 5: Fill in the "verification" section. Also, the form should be duly signed by you and the head of the government hospital. He/she must hold a post-graduate degree in General or Internal Medicine.

The government plans to extend the tax benefits to help the patients suffering from the current healthcare crisis. So keep these above pointers in mind to enjoy 80DDB deduction without any hassle.