Section 80DDB of Income Tax Act, Who can Avail & Documents Required

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 -

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

Other diseases include

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

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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.

• 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.

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.

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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.