Section 80DDB provides for Income Tax Deduction under Chapter VI-A for payment of medical treatment of a person suffering from a specified disease. The deduction under Section 80DDB is allowed only to Individual and HUF’s.
Moreover, this deduction is only allowed to those Individuals and HUF’s which are resident in India for that year. (Recommended Read: Residential Status for the purpose of Income Tax)
The expense should be incurred by the Individual or HUF either for himself or for any dependent family member. The term dependent in case of a HUF means any member of the HUF. In case of Individuals, the term dependent means:-
- Wholly/ Mainly dependent Spouse
- Wholly/ Mainly dependent Children
- Wholly/Mainly dependent Parents
- Wholly/ Mainly dependent Brother
- Wholly/ Mainly dependent Sisters
The deduction allowed shall be least of the following:-
- Actual amount paid
- Rs. 40,000
In case the actual amount paid is less than Rs. 40,000, the actual amount that has been paid will be allowed as a deduction under Section 80DDB. However, in case the actual amount paid is more than Rs. 40,000, only Rs. 40,000 will be allowed as a deduction under Section 80DDB.
However, the above limit of Rs. 40,000 shall be increased to Rs. 60,000 in case the person on behalf of whom the payment is being made is a senior citizen. (For the purposes of Income Tax, any person who has attained the age of 60 at any time during the year is considered as a Senior Citizen)
Budget 2015 has brought in an amendment to Section 80DDB and the deduction under Section 80DDB has been increased for very senior citizens to Rs. 80,000. Very Senior Citizens are those Individuals who are above the age of 80 years.
Moreover, it has also been clarified that in case any amount which has been so paid has been received back under insurance from an insurer, or reimbursed by the employer – the deduction allowed under section 80DDB shall be reduced by the amount received/reimbursed.
The deduction of Rs. 40,000/ Rs. 60,000/ Rs. 80,000 allowed under Section 80DDB is allowed over and above the limit of Rs. 1,50,000 under Section 80C
Specified Disease under Section 80DDB
Deduction under Section 80DDB is allowed for Medical Treatment of the following specified diseases:-
- Neurological Diseases
- Malignant Cancers
- Full blown Acquired Immuno Deficiency Syndrome (AIDS)
- Chronic Renal Failure
- Hematological Disorders
For a detailed note on the specified disease for which deduction can be claimed and the certificate allowed to furnished for such diseases, kindly refer this link – http://law.incometaxindia.gov.in/dittaxmann/incometaxacts/2005itact/rules011dd.htm
Amendment introduced by Budget 2015 in Section 80DDB
Prior to introduction of Budget 2015, the assessee was required to submit a certificate in the prescribed form, from a neorologist, an oncologist, a urologist, a haematologist, an immunologist or such other specialist doctor working in a Govt hospital. This requirement of obtaining a certificate from a doctor working in a Govt Hospital causes undue hardship to the persons intending to claim the aforesaid deduction.
The Govt hospitals at many places do not have doctors specialising in the above branches of medicine. For this and many other reasons, it may be difficult for a taxpayer to obtain a certificate from a Govt Hospital.
In view of the above, Section 80DDB has been amended by the Finance Act 2015 so as to provide that the assessee can submit a certificate from a specialist doctor whether working in Govt Hospital or not.
Just like Section 80DDB is a deduction for ailment of specified diseases, similarly Section 80DD & Section 80U are deductions for medical treatment of a person with disability.
- Recommended Read: Deduction under Section 80DD & Section 80U for Disability