What Is Section 80DDB and Who Is Eligible For Tax Exemption

Inflation in the healthcare sector has been a nightmare for most of the middle-income sector of India. Moreover, each year, a lot of deaths happen due to a lack of proper care and treatment. Many critical illnesses, such as AIDS and cancer, burn a hole in the pockets of individuals due to hefty medical bills, procedures, and taxes. Therefore, tax deductions are provided under Section 80DDB of the Income Tax Act of 1961 in order to shield people from paying high taxes. 

According to Section 80DDB of the 1961 Income Tax Act, taxpayers can claim tax exemptions for certain critical diseases and ailments. In this blog post, we’ll help you understand what is meant by Section 80DDB of the Income Tax Act and who is eligible for a tax deduction. Continue reading for the details! 

Diseases That Are Covered Under Section 80DDB

There are specific diseases for which you can claim tax deductions under Section 80DDB of the Income Tax Act. The following is the 80DDB deduction disease list: 

• Neurological diseases such as Dementia, Ataxia, Chorea, Aphasia, Parkinsons disease where the disability level is upto 40% and above. 
• Haematological disorders including Hemophilia and Thalassaemia
• Malignant cancer 
• Acquired Immuno Deficiency Syndrome (AIDS)
• Chronic renal failure

Who Can Claim Tax Exemption Under Section 80DDB? 

An individual or Hindu undivided family (HUF) are only eligible for tax deductions under Section 80DDB of the Income Tax Act. Moreover, any assessee who is an Indian resident can claim a tax deduction on medical expenses. Any corporation, entity, or non-resident Indian cannot claim a tax under this section. The medical costs incurred from the treatment can be claimed by the following:

• Individuals: In this case, the medical costs incurred due to the treatment of the dependants such as a spouse, children, parents, and siblings are tax-free. 

• Hindu Undivided Family: In this case, tax on medical expenses is exempted if it has been incurred from the treatment of any member of the Hindu Undivided Family. 

Documents Required To Claim Tax Exemption Under Section 80DDB

In order to claim a deduction under Section 80DDB of the Income Tax Act, it is necessary to submit proof of the treatment. Thus, it is mandatory to have a prescription issued by a qualified doctor to claim a tax deduction. You can obtain the prescription from doctors with the following qualifications: 

1. A prescription from a Neurologist with a Doctorate of Medicine in Neurology or any comparable degree is required in the case of neurological illnesses.
2. A prescription from an Oncologist with a Doctorate of Medicine in oncology or any similar degree is required in the case of malignant cancer.
3. A prescription from any expert with a postgraduate degree in general or internal medicine or any similar degree is required in the case of AIDS.
4. A prescription from a Nephrologist with a Doctorate of Medicine (D.M.) degree in Nephrology or a Urologist with a Master of Chirurgiae (M.Ch.) degree in Urology or any similar degree is required in the case of Chronic Renal Failure.
5. In the case of the last stage of Hematological disorders, an expert with a Doctorate of Medicine in Hematology or any similar degree is required.

As a result, a prescription from a suitable professional in the field of medicine is required. Moreover, all degrees must be approved by the Medical Council of India. If you had your treatment in a government hospital, you can get a prescription issued from any doctor working full-time with a degree in medicine. 

What Is the Maximum Amount You Can Claim Under Section 80DDB? 

Under Section 80DDB of the Income Tax Act of 1961, you can claim a tax deduction for expenses incurred due to medical treatment, depending on the individual’s age. Thus, the deduction amount that can be claimed under Section 80DDB is as follows:

However, there are certain terms and conditions that are listed below. 

1. A senior citizen is defined as any resident Indian who has reached the age of sixty or more at any point during the preceding year.
2. Any resident Indian who has completed eighty years or more at any moment during the relevant previous year is considered a higher senior citizen. 

Final Thoughts

In conclusion, tax deductions offered for premiums paid against a health insurance policy are totally different from the tax exemptions under Section 80DD of the Income Tax Act. Any individual or Hindu undivided family who is a resident of India can claim a tax deduction under Section 80DDB for certain diseases.

Also Read: 

Are Congenital Diseases Covered Under Health Insurance?