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80DDB Deduction Limits: Comprehending Tax Benefits for Medical Expenses

Welcome to our blog on Section 80DDB of the Income Tax Act - a beneficial provision that allows individuals and HUFs to deduct specific medical expenses from their taxable income. This interactive introduction will take you on a journey to understand how Section 80DDB works and the various ailments it covers for tax deductions.


Defining attributes of Section 80DDB deduction limit:


Section 80DDB is a component of the Income Tax Act that empowers eligible individuals and HUFs to reduce their taxable income by deducting certain medical expenses.


Elaborating on what expenses get covered:


The Government provides tax deductions under Section 80DDB for specific ailments as outlined in the Act. Expenses incurred for treating these illnesses are eligible for deductions.


Understanding who can claim 80DDB deduction:


Individuals can claim medical expenses for themselves or their dependents under Section 80DDB. Dependents can include spouses, parents, children, or dependent siblings.


The deduction amount under Section 80DDB is influenced by two factors: the patient's age and the actual amount spent on medical expenses. For individuals below 60 years of age, the maximum deduction limit is Rs. 40,000. However, in the case of a senior citizen aged 60 years or more, the maximum limit for deduction is Rs. 1 lakh.


According to the Income Tax Department guidelines, individuals may be eligible to claim deductions under Section 80DDB for the treatment of specific diseases, with prescriptions issued by the following specialists:

1) Malignant Cancers: Prescription issued by an Oncologist (having DM or equally recognized degree).


2) Neurological Diseases (with disability level certified 40% and above):

  • Dementia

  • Dystonia Musculorum Deformans

  • Motor Neuron Disease

  • Ataxia

  • Chorea

  • Hemiballismus

  • Aphasia

  • Parkinson's Disease Prescription issued by a Neurologist (having DM or equally recognized degree).

3) Full Blown Acquired Immunodeficiency Syndrome (AIDS): The required prescription should be issued by a Specialist possessing a postgraduate degree in general or internal medicine or an equivalent qualification.


4) Haematological Disorders:

  • Haemophilia

  • Thalassemia The prescription must be provided by a Specialist with a DM in Hematology or an equally recognized degree.

5) Chronic Renal Failure: The prescription must be issued by a qualified medical professional with expertise in Nephrology (holding a DM or equivalent recognized degree) or Urology (holding an MCh in Urology or equivalent qualification).


Important Points to Consider for Section 80DDB Deduction:

  1. Eligible Dependents: For individual assesses, dependents eligible for deduction include the spouse, children, parents, brothers, and sisters. In the case of a Hindu undivided family (HUF), dependents are members of the family.

  2. Obtaining the Certificate: To claim the deduction under Section 80DDB, it is mandatory to obtain a certificate from a specialist relevant to the type of disease. Specialists may include neurologists, oncologists, urologists, haematologists, immunologists, or other relevant medical professionals.

  3. Deduction and Reimbursement: If the assessee receives medical expense reimbursement from insurance or their employer, the deduction amount will be adjusted. The eligible deduction will be the deduction available minus the reimbursement amount. This ensures that the assessee does not benefit from both reimbursements and a deduction on the same expenses.


Understanding Deduction under Section 80DDB


Overview: Section 80DDB of the Income Tax Act offers deductions for medical treatment expenses incurred for a dependent suffering from specified diseases listed in the table below. This deduction is available to both Individual taxpayers and Hindu Undivided Families (HUFs) who are Resident Indians. Let's explore the key details of this deduction:

  1. Eligible Expenses and Dependents: The deduction can be claimed when the taxpayer has incurred medical expenses for the treatment of their dependant. Dependents include spouses, children, parents, and siblings.

  2. Eligibility of Resident Indians: This deduction is allowed only to Resident Indian taxpayers.

  3. Insurance or Reimbursement Adjustment: If the dependant is insured, and there is some payment received from an insurer or reimbursement from the employer, such amounts will be subtracted from the deduction to prevent double benefits.


Prescription Format for Section 80DDB Deduction:


To claim the 80DDB deduction, prescriptions must be issued by qualified specialists in the relevant field and strictly follow the assigned format. The prescription should include the patient's name, age, and specific disease or ailment. Additionally, the specialist doctor must provide their name, address, qualification, and registration number. If the treatment is in a government hospital, the hospital's name and address should be mentioned, and the form must be signed by the head doctor. While filing the income tax return, this prescription form is submitted to the income tax department. It is recommended to keep a copy of the prescription for future reference, as no document is attached to the ITR.


FAQs:


Q: What medical condition does the prescription for Chronic Renal Failure cover under Section 80DDB?


A: The prescription is specifically for the treatment of Chronic Renal Failure.


Q: Who are the qualified medical professionals authorised to issue the prescription for Chronic Renal Failure?

A: The prescription can get issued by either a Nephrologist with a DM or equally recognized degree, or a Urologist with an MCh in Urology or equivalent qualification.


Q: Can a prescription from a different specialist be considered for claiming the Section 80DDB deduction?


A: No, the prescription must come from a qualified Nephrologist or Urologist as mentioned in the guidelines.


Q: Why is it important to adhere to the specified medical professionals for issuing the prescription?

A: Adhering to the specified medical professionals ensures the compliance and validity of the claim for the Section 80DDB deduction.


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