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) are eligible for section 80DDB.
The individual or HUF must be a citizen of India. Non-resident individuals or corporate assesses cannot claim the benefit under this section. &
To be eligible, you must be a taxpayer and have incurred medical expenses for the treatment of diseases affecting your dependents.
In this context, dependents refer to:
If the assessee is an individual, dependents include the spouse, children, siblings, and parents of the individual.
If the assessee is an HUF, any member of the Hindu Undivided family can be considered a dependent
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 -
Other diseases include
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:
Ensure that you have incurred eligible medical treatment expenses for the specified disease. These expenses can include fees paid to medical practitioners, costs of diagnostic tests, medicines, and other expenses directly related to the treatment. Keep proper records and receipts of the expenses incurred.
If you are claiming the deduction for a dependent family member, ensure that they meet the definition of a dependent as per the Income Tax Act.
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.
Take a look at the table below to know from whom you can receive the same:
[1]
|
Disease |
Certificates |
|
Neurological Disease |
A prescription from a Neurologist (Doctorate of Medicine in Neurology or any equivalent degrees) |
|
Severe Renal Failure |
A prescription from a Nephrologist (Doctorate of Medicine in nephrology or other equivalent degree). Or else, a prescription from a Urologist (Master of Chirurgiae or other equivalent degrees) |
|
Malignant Cancer |
A prescription from an Oncologist (Doctorate of Medicine in oncology or other equivalent degrees) |
|
Haematological Disorders (Thalassaemia and Hemophilia) |
A prescription from a specialist (Doctorate of Medicine Degree in Hematology or other equivalent degrees) |
|
AIDS |
A prescription from a doctor (Post Graduate Degree in general or internal medicine or other equivalent degrees) |
Also, 2 things to remember:
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.
He/she must collect a medical certificate from a full-time working medical practitioner.
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.
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.
Follow the step-wise guide to fill up the 80DDB Form:
The deduction under 80DDB is completely based on the age of the dependent on whom you have incurred medical expenses. So let's take a look at the age category:
|
Category |
Age Description |
|
Seniors |
Individuals categorised as seniors are Indian resident and are 60 years or more in the given year. |
|
Super Seniors |
Super senior citizens are Indian residents who are 80 years of age or more in the given year. |
The maximum ceiling of tax deduction is the actual paid medical cost or ₹40,000 whichever comes first. Considering this, the amount of deduction follows:
|
Age |
80DDB Deduction Amount |
|
Less Than 60 Years |
₹40,000 or the actual medical cost, whichever is less |
|
60 Years Or Above |
₹1,00,000 or actual medical cost, whichever is less |
|
80 Years Or Above |
₹1,00,000 or the actual medical cost, whichever is less |
Reduce by amount reimburse by employer or insurer
Example: If your employer or insurer reimburses the medical cost, that credit is adjusted in 80DDB deduction. For example, if you incur a medical cost worth ₹60,000, you can claim a tax exemption of ₹40,000. But, suppose your insurer reimburses ₹30,000 medical costs for the specified diseases. Then, you can claim a deduction of only ₹10,000 under section 80DDB Income Tax Act.
Remember, if the reimbursement exceeds beyond the permissible amount of ₹40,000, then you cannot enjoy a tax deduction. However, if the dependent is a senior citizen, you can enjoy a tax exemption of ₹1,00,000.
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.
Please try one more time!
Disclaimer: This information is added only for informative purposes and collected from different sources across the Internet. Digit Insurance is not promoting or recommending anything here. Please verify the information before making any decisions.
Continue with {{bikeCtrl.lastVisitedData.lastVisitedUrl.indexOf('DigitPaymentGateway/payments')
!== -1 ? 'payment completion': 'previous choice'}}
{{healthCtrl.lastVisitedData.dropOffPolicyHolderData ? 'Complete your purchase': healthCtrl.lastVisitedData.lastVisitedUrl.indexOf('plans-page')
!== -1 ? 'Continue Browsing' : 'Continue with your previous choice'}}
