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Understanding Tax Advantages: Limits on 80DDB Medical Expense Deductions

We invite you to read our blog dedicated to Section 80DDB of the Income Tax Act, a valuable provision that enables individuals and Hindu Undivided Families (HUFs) to reduce their taxable income by deducting specific medical expenses. Is. This interactive introduction will guide you through the complexities of Section 80DDB and highlight the range of medical conditions eligible for tax deductions.

Key features determining the limit of deduction under Section 80DDB

Section 80DDB is a provision within the Income Tax Returns Act, which enables eligible individuals and Hindu Undivided Families (HUFs) to reduce their taxable income through the deduction of specified medical expenses.

Expansion of scope of covered expenses:

A tax deduction is provided by the government as per section 80DDB, especially for specified medical conditions mentioned in the law. These expenses related to the treatment of these diseases are eligible for deduction.

Income Tax Returns

Clarifying eligibility to claim 80DDB deduction:

Under Section 80DDB, individuals have the opportunity to claim deductions for medical expenses incurred by themselves or on behalf of their dependents. Dependents include spouses, parents, children or siblings who are financially dependent on the taxpayer.

The amount deductible under Section 80DDB depends on the age of the patient and the actual medical expenses incurred. Individuals below 60 years of age can claim a maximum deduction of Rs. 40,000, while senior citizens aged 60 years and above can claim a maximum deduction of Rs. 1 Lac.

As per the guidelines laid down by the Income Tax Department, individuals are eligible to avail of deduction under Section 80DDB for treatment of specific diseases provided they have prescriptions from the following specialists:

  1. Malignant Cancer: A prescription from an oncologist holding DM or a similar recognized degree.
  2. Neurological diseases (with a certified disability level of 40% or more):

Prescription is provided by a licensed neurologist holding the Doctor of Medicine (DM) degree or equivalent recognized qualification for neurological conditions such as dementia, dystonia musculorum deformans, motor neuron disease, ataxia, chorea, hemiballismus, aphasia and Parkinson’s disease.

  1. Acquired Immunodeficiency Syndrome (AIDS) in its advanced stage: A specialist with a postgraduate degree in general or internal medicine or equivalent qualification should issue the necessary prescription.
  2. Blood-Related Disorders:
  • hemophilia
  • Thalassemia

For these conditions, a specialist holding a DM or similarly recognized degree in hematology must provide the prescription.

  1. Chronic Renal Failure: To qualify for deduction under section 80DDB, a certified medical professional specializing in Nephrology (possessing DM or equivalent recognized degree) or Urology (possessing MCh or equivalent qualification in Urology) Prescription will have to be issued.
Online Income Tax Returns

Key Points for Section 80DDB Deduction:

  • Eligible Dependents: In the case of an individual taxpayer, the deduction can be claimed for eligible dependents including spouses, children, parents, brothers and sisters. In Hindu Undivided Families (HUF), dependents are defined as family members.
  • Certificate required: To be eligible for Section 80DDB deduction, it is mandatory to obtain a certificate from a specialist related to the specific disease. These specialists may include neurologists, oncologists, urologists, hematologists, immunologists, or other relevant medical professionals.
  • Adjustment for deductions and reimbursements: If the assessee receives medical expense reimbursement from insurance or their employer, the deduction amount will be adjusted accordingly. Eligible deduction will be calculated as reimbursement amount less available deductions. This ensures that the assessee does not benefit from both reimbursement and deduction for the same medical expenditure.

Understanding Deduction as per Section 80DDB

  • Overview: Section 80DDB within the framework of the online Income Tax Returns Act provides a means to deduct medical treatment expenses incurred on behalf of dependents suffering from specific diseases as detailed in the table below. This deduction applies to both individual taxpayers and Hindu undivided families (HUFs) who are classified as resident Indians. Let us look at the essential aspects of this deduction:
  • Eligible Expenditures and Beneficiaries: This deduction can be availed when the taxpayer has spent money on medical treatment for his dependent family members. Dependents include spouses, children, parents and siblings.
  • Eligibility for Resident Indians: Resident Indian taxpayers are exclusively eligible for this deduction.
  • Adjustments for insurance or reimbursement: In cases where the dependent is covered by insurance, and receives payment from the insurer or reimbursement from the employer, these amounts will be reduced from the deduction to prevent duplication of benefits.
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Prescription Requirements for Section 80DDB Deduction:

To avail of Section 80DDB deduction, prescriptions must follow specific guidelines. These guidelines direct that prescriptions should be issued exclusively by qualified experts in the medical field and should strictly follow the prescribed format.

The prescription should include important details such as the patient’s name, age and the exact disease or illness being treated. In addition, the specialist doctor responsible for the prescription must submit his name, address, qualifications and registration number.

If the treatment is done in a government hospital, the prescription should also include the name and address of the hospital. In such cases, the prescription form must be signed by the main doctor supervising the treatment.

While filing income tax returns, it is necessary to submit this prescription form to the income tax department as part of the documentation process. It is strongly advised to retain a copy of the prescription for future reference, as no supporting documents are attached to the income tax return.

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