Section 80DDB – Income Tax benefit for your Medical Treatment – Your Finance Book #income

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Section 80DDB – Income Tax benefit for your Medical Treatment

Section 80DDB is applicable to an individual and HUF with effect from first of April 2004. Under Section 80DDB, an individual or HUF can claim tax deduction up to a maximum amount of Rs 40, 000 for medical treatment expenses paid during the previous year .

In the case of senior citizen the tax deduction amount can go up to Rs 60, 000.

Who is eligible for tax deduction on medical treatment Section 80DDB

Following persons are eligible to claim tax deduction under section 80DDB for their medical treatment subject to fulfillment of other terms and conditions;

  • A salaried or self employed person and any other individual taxpayer, or
  • HUF

To claim tax deduction under section 80DDB for medical treatment, the taxpayer is to be a resident in India during the financial or previous year.

A foreign citizen who is resident in India can also take tax benefit of section 80DDB as this section will be applicable to them as well.

Persons for whom Medical expenses are to be incurred Section 80DDB

To claim tax deduction under section 80DDB, medical expenses are to be incurred for medical treatment of;

  • The taxpayer himself or
  • Wholly dependent spouse, Children, Parents, Brothers and Sisters of the taxpayer or any of them

Such expenses are to be incurred by the individual who wants to claim tax deduction under section 80DDB.

In case of a HUF, medical expenditures are actually to be incurred and paid for the medical treatment of any member of the HUF family. If HUF claimed exemption for the medical treatment then members of such HUF can not claim tax deduction under section 80DDB for the same amount.

Tax Deduction Limit Section 80DDB

A maximum tax deduction of Rs. 40, 000 can be claimed under section 80DDB for medical treatment of specified diseases.

If taxpayer has incurred a lesser amount towards medical treatment then such lesser amount will be allowed as income tax deduction under section 80DDB.

This means, the amount of tax deduction under section 80DDB is Rs. 40, 000 or the amount actually paid which ever is lower.

If amount paid for medical treatment with respect to taxpayer or dependent spouse, children, parents, brothers and sisters of such taxpayer or any of them who is a senior citizen then tax deduction under section 80DDB can be claimed up to Rs 60, 000.

This means, the available amount of tax deduction in this case under section 80DDB is Rs 60, 000 or the amount actually paid which ever is lower. A senior citizen is a person who is resident in India and who is at least 60 years of age at any time during the previous year.

Budget 2015 has amended section 80DDB to allow tax deduction up to Rs 80000 for very senior citizens. This means, if the person for whom amount actually paid is a very senior citizen then the person who made payment can claim tax deduction of Rs 80000 or the amount paid which ever is lower under section 80DDB for medical treatment of specified diseases.

Rs 80000 tax deduction under section 80DDB can be claimed from assessment year 2016-2017 i.e. financial year 2015-2016 onwards.

Very senior citizen means an individual resident in India who is of the age of 80 years or more at any time during the relevant previous year.

Please remember that section 80DDB deductions are allowed over and above the limits as specified under section 80C of Income tax act 1961. For assessment year 2015-2016 80C maximum exemption limit is Rs 150000.

Other conditions to claim tax deduction Section 80DDB

  • To claim tax deduction under section 80DDB for medical treatment you have to actually paid such amount during the previous year for the medical treatment of specified disease or ailment as prescribed by the board. This means to claim tax deduction under section 80DDB for assessment year 2015-2016, the assessee must have paid for medical treatment during the financial year starting from 1st of April 2014 to 31st march 2015.
  • To claim the benefit of section 80DDB, the tax payer has to get a certificate in the prescribed form from a neurologist, an oncologist, a urologist, a hematologists, an immunologist or such other specialist as many be prescribed, working in a Government Hospital or in any other hospital. As per the new law, to claim tax deduction under section 80DDB for medical treatment, the taxpayer is not required to submit the certificate to income tax department. Instead he has to keep the certificate with himself and in case asked by the assessing officer then such certificate need to be produced before the assessing officer.
  • Tax deduction claimed under section 80DDB will be reduced by the amount received under insurance from an insurer or reimbursed by an employer.

Budget 2015 has made another amendment to section 80DDB by which the tax payer can also get a certificate in the prescribed form from a neurologist, an oncologist, a urologist, a hematologists, an immunologist or such other specialist as many be prescribed, working in any hospital i.e. it can be government hospital or private hospital.

FAQ on Section 80DDB – Tax Deductions for Medical Treatment

Question 1: What are the specified diseases and ailments for the purpose of deduction under section 80DDB of income tax act, 1961?

Answer: For the purposes of section 80DDB, the following shall be the eligible diseases or ailments:

(i) Neurological Diseases where the disability level has been certified to be of 40% and above,—

(iii) Full Blown Acquired Immuno-Deficiency Syndrome (AIDS) ;

To know more on specified diseases under section 80DDB please read our article on rule 11DD of IT Act .

Question 2: Who can issue a certificate under section 80DDB of income tax act?

Answer: Following persons can issue certificate to claim income tax deduction under section 80DDB for medical treatment;

For Neurological Diseases a Neurologist having a Doctorate of Medicine (D.M.) degree in Neurology or any equivalent degree, which is recognized by the Medical Council of India

For Malignant Cancers an Oncologist having a Doctorate of Medicine (D.M.) degree in Oncology or any equivalent degree which is recognized by the Medical Council of India

For Chronic Renal failure a Nephrologists having a Doctorate of Medicine (D.M.) degree in Nephrology or a Urologist having a Master of Chirurgiae (M.Ch.) degree in Urology or any equivalent degree, which is recognized by the Medical Council of India;

For Hematological disorders a specialist having a Doctorate of Medicine (D.M.) degree in Hematology or any equivalent degree, which is recognized by the Medical Council of India

Provided that where in respect of any diseases or ailments specified in sub-rule (1), no specialist has been specified or where the specialist specified is not posted in the Government hospital in which the patient is receiving the treatment, such certificate, with prior approval of the Head of that hospital, may be issued by any other specialist working full-time in that hospital and having a post-graduate degree in General or Internal Medicine, which is recognized by the Medical Council of India.

Budget 2015 has amended section 80DDB by which, a tax payer can get a certificate in the prescribed form working in any hospital i.e. it can be government hospital or private hospital.

Question 3: I have incurred Rs. 30, 000 as medical expenses for my grand father on Chronic Renal Failure. Can I claim it as tax deduction under section 80DDB?

Answer: No, you are not eligible for this deduction as section 80DDB does not allow any payment for medical treatment of grand father as deduction.

Question 4: I am a NRI and have incurred Rs. 24, 000 as medical expenses for medical treatment of my dependent mother who is suffering from Hematological disorders. Can I claim this amount as income tax deduction under section 80DDB against my taxable income that I am generating in India?

Answer: No, section 80DDB is not applicable for a taxpayer who is a non resident even though the person for whom you are making payment is a resident.

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