Written by : Knowledge Centre Team

2024-08-02

1149 Views

Locate branch

Resume journey

Pay Premium

Section 80DDB of Income Tax Act - Certificate & Deductions

Section 80DDB is a part of the deductions from gross total income under section 80 of the Income Tax Act. You can avail of the deduction as an individual or HUF taxpayer. You can claim the expenses you incurred for the treatment of diseases listed under Rule 11D of the Income Tax Act. The list includes various types of cancers, AIDS, renal failure, dementia, etc. Deduction under section 80DDB is different from Sections 80U and 80DD.

Deduction under Section 80DDB

Section 80DDB provides for a deduction to Individuals and HUFs for medical expenses incurred for the treatment of specified diseases or ailments. Such expense is allowed as a deduction, subject to such conditions, and capped at such amount as specified, under Section 80DDB. It should be exempted from the Gross Total Income while calculating taxable income of the assessee.

When is Deduction Allowed under Section 80DDB?

Rule 11D of the Income Tax Act, 1961 lists the eligible specified diseases for the deduction under Section 80DDB. You will also need a prescription from the specified specialist for the medical condition you want to claim the deduction.

List of Specified Diseases under Section 80DDB

Serial Number	Disease Category	Prescription/Diagnosis by
1	Neurological Diseases where the disability is certified at 40% or above: Dementia Dystonia Musculorum Deformans Motor Neuron Disease Ataxia Chorea Hemiballismus Aphasia Parkinson’s Disease	a Neurologist having a Doctorate of Medicine (D.M.) degree in Neurology*
2	Malignant Cancers	an Oncologist having a Doctorate of Medicine (D.M.) degree in Oncology*
3	Full Blown Acquired Immuno-Deficiency Syndrome (AIDS)	Specialist having a post-graduate degree in General or Internal Medicine*
4	Chronic Renal failure	a Nephrologist having a Doctorate of Medicine (D.M.) degree in Nephrology* or a Urologist having a Master of Chirurgiae (M.Ch.) degree in Urology*
5	Haematological disorders Haemophilia Thalassaemia	a specialist having a Doctorate of Medicine (D.M.) degree in Haematology*

* or any equivalent degree, recognised by the Medical Council of India

How much Deduction is Allowed under Section 80DDB?

You can claim the expenses you incur for the medical treatment of a dependent family member under section 80DDB. The maximum deduction available is the lower of:

- Actual expenses paid for the treatment
- Rs 40,000 if the patient is below 60 years of age (else Rs 1 lakh)

The amount of deduction you can avail yourself under the section will be limited as per the following:

Age of the Patient	Deduction
Below 60 years	Up to Rs 40,000
60 years but below 80 years	Up to Rs 1 lakh
Above 80 years of age	Up to Rs 1 lakh

You should note that if you have a life insurance policy which covers such treatment expenses for the patient you will need to account for the reimbursed amount. For example, if your total expense on the treatment of your family member for a specified disease had been Rs 1 lakh and the insurer reimbursed or covered Rs 65,000 out of it, you can only claim the remaining Rs 45,000 under section 80DDB.

Another factor which you should keep in mind about the deduction is that it is available only on the expenses actually paid.

How to Get a Certificate of the Disease for 80DDB Deduction?

You will need to avail of a certificate or prescription of the diagnosis from a relevant specialist for the disease to claim your 80DDB deduction. Here are a few salient points you should consider while acquiring a certificate:

a) Acquire the certificate from the same hospital where treatment has been provided

b) Make sure the certifying expert has the relevant qualification to diagnose and treat the disease. For example:

D.M. in Neurology for neurological diseases
D.M. in Oncology for malignant cancers
Post-graduate in General Internal Medicine for AIDS

c) Form 10-I is no longer required for 80DDB claims

d) The certificate must contain the following information:

Name of the ailment/disease
Patient’s information – Name, age.
Details of certifying expert(s):
- Qualification
- Registration number
- Name, address

If the treatment was availed at a government hospital, the name, and address of the hospital

Prescription Format for Claiming 80DDB Deduction

You will need a standard prescription format to claim your deduction under Section 80DDB. The format should contain the following information:

- Details of the Patient

Name
Age
Name of Disease or Ailment

- Details of the prescribing Specialist

His/her name
Address
Qualification(s)
Registration number

- When the treatment is provided in a government hospital

The name and address of the government hospital/institution

- The form must be signed by the following:

Head of the department for the specialization at the hospital
Prescribing/treating doctor

Earlier taxpayers were expected to fill and submit Form 10-I to claim deduction under Section 80DDB. However, the form has been abolished now and you can simply ensure all the information above is provided in a simple prescription format.

Although you will not need to submit this while filing your income tax return, you must keep the documents available if asked.

What Documents are Required & How to Claim Deduction under Section 80DDB?

You can claim the eligible expenses under Section 80DDB while filing your annual income tax return. Make sure you have the prescription from the hospital for the treatment and medical condition of the eligible patient. The disease of the medical condition prescribed in the form should be one of the specified conditions under Rule 11 of the Income Tax Act.

While you do not need to submit the prescription form and bills with your ITR, your assessing officer can demand it while reviewing your return.

Is cancer covered under section 80DDB of the Income Tax Act?

Yes, Section 80DDB covers any malignant cancer condition. The disease has to be recognized and diagnosed by an oncologist having a Doctorate of Medicine (D.M.) or equivalent degree in Oncology.

Can 80DD and 80DDB be claimed together?

Yes, you can claim deductions under both Section 80DD and 80DDB at the same time for the respective expenses.

What is the difference between section 80DD and 80DDB?

Section 80DD refers to the expenses incurred in maintaining and caretaking a dependent family member with a major disability. On the other hand, Section 80DDB refers to the expenses of medical treatment for specified diseases and medical conditions. Deductions under section 80DD could be regular, while section 80DDB deductions can be temporary.

FAQ

Income tax in India is based on incremental slab rates. The rate of tax is higher on higher income. You can also avail deductions from your taxable income if you invest in eligible instruments like PPF, NPS, ELSS, ULIPs, etc. Starting AY 2020-21 you have two tax regimes – old and new. The old tax regime has all the deductions from gross total income, while the new tax regime offers a lower rate of tax. So, if you are not investing in tax-saving instruments you can file your tax as per the new tax regime.

You can avail additional tax savings under the following sections other than section 80C:

a) Section 80D: Health insurance premium payments for family and parents up to Rs 75,000
b) Section 80CCD(1B): Self-contribution to NPS Tier-I account above 10% of salary or 20% of income if self-employed up to Rs 50,000
c) Section 80E: Education loan interest paid through the year
d) Section 80EE: Home loan interest paid up to Rs 50,000
e) Section 80G: Charitable contributions to non-profit organisations registered under section 12A up to 50% or 100% of the contribution
f) Section 24B: Interest paid on home loan

You have many tax-saving investment options. You can consider the following popular tax-saving schemes to save tax:

a) Term life insurance plan
b) Health and critical illness insurance plan
c) Life insurance plans such as endowment and moneyback plans
d) Pension plans from life insurance companies
e) Public Provident Fund (PPF)
f) National Pension System Tier-I account (NPS)
g) Employee Provident Fund (EPF)
h) Unit Linked Insurance Plans (ULIPs)
i) Equity Linked Savings Scheme (ELSS)
j) Senior Citizen Savings Scheme
k) Sukanya Samriddhi Yojana
l) 5-Year Tax Saving Fixed Deposits
m) National Savings Certificate (NSC)

Deduction of Rs 1.5 or 2 Lakhs under section 80C is available when you make investments or spend money under the heads mentioned in the Chapter VI A of the Income Tax Act, 1961. All tax-saving investments like PPF, NPS, ULIP, ELSS, etc. and all tax-saving expenses like children’s tuition fees, and registration expenses of a house property are part of Chapter VI A.

You will need to pay taxes on the incomes and gains from your investments. For example, your salary income is Rs 10 lakhs in a year, out of which Rs 7.5 lakhs becomes taxable after deducting exempt perquisites. Out of your income of Rs 10 lakhs, you invest Rs 3 lakhs in various options.

Even if none of your investments is eligible for tax saving under section 80C, your taxable income will remain Rs 7.5 lakhs. However, returns from some of these investments will become taxable in the next financial year when you receive them.

Since AY 2020-21 you have two ways to lower your income tax outflow on higher income – tax-saving investments and a new tax regime. You can stick to the old tax regime and invest your savings into eligible tax saving options. Tax-saving investments can give you a deduction of up to Rs 2 lakhs under sections 80C and 80CCD(1B), and additional deductions of up to Rs 2 lakhs under section 24.

Your deductions will be higher with other sections like 80E and 80G. But these are specific outflows which are not investments.

The best way to reduce your tax outflow legally is to use tax-saving investments and plan your future taxes carefully. Tax-saving investments will help you reduce your taxable income in the present financial year. If you invest in options which enjoy tax exemptions on maturity values, you can also reduce your future tax outflow. For example, Invest 4G ULIP from Canara HSBC Life Insurance allows you to stay invested up to the age of 99. This means that you can start investing at 30, build a corpus by 60 and have a tax-free lifetime pension.

Usually, a receipt is a convenient document to produce while claiming your deductions for expenses. However, the following alternatives are available if you lose the receipt:

a) Avail fuel or petrol expenses with number of kilometres
b) Credit card statement for computer items
c) Credit/debit card statement for stationery items
d) Membership documents to show running membership to claim the fees amount

You can claim HRA exemption with your employer and declare the amount in your ITR-1 form while filing your tax return. You will need to submit your house rent receipts with your employer to reduce your TDS. Use the online calculator to estimate your HRA exemption and claim the amount directly in your ITR.

If you are self-employed or do not receive HRA from your employer but have been paying rent for residence, you can claim a deduction of up to Rs 60,000 under section 80GG.

You can calculate your HRA exemption based on the following conditions. The amount of exempt HRA will be the lowest of the three:

a) HRA you have received
b) 50% of salary (basic + DA + Commission paid as % of turnover) if you are staying in a metro city otherwise 40%
c) Rent paid over 10% of your salary (as defined in step 2)

80CCC: What is Deduction under Section 80CCC?

What is Tax Collected at Source (TCS)

Tax Savings - Top Selling Plans

We bring you a collection of popular Canara HSBC life insurance plans. Forget the dusty brochures and endless offline visits! Dive into the features of our top-selling online insurance plans and buy the one that meets your goals and requirements. You and your wallet will be thankful in the future as we brighten up your financial future with these plans.