Individual or HUF assessee can claim income tax deduction under section 80DDB of the income tax act. Income Tax Deduction under 80DDB allowed for actual expenditure for medical treatment of Neurological Diseases (with disability of more than 40%), Malignant Cancers, Acquired Immuno-Deficiency Syndrome (AIDS), Chronic Renal failure and Hematological disorders. Expenditure under section 80DDB allowable deduction even for family members. Maximum Income Tax Deduction under section 80DDB is Rs 40000/- and Rs 60000/- if expenditure done for senior citizen dependent. Please note that if assessee has received any amount from insurance company than deduction will be reduced by such insurance receipt.
Conditions for Claiming Income Tax Deduction u/s 80DDB
- The taxpayer is an individual or a Hindu undivided family and resident in India.
- Paid any amount for medical treatment for specified disease or ailment as prescribed by the board.
- The taxpayer who is part of HUF made expenditure incurred for wholly/mainly dependent family member for her/his medical treatment.
Maximum Amount of Deduction Claimed under section 80DDB
- The amount of deduction Rs. 40,000 or amt. actually paid whichever is lower.
- Deduction under this section shall be reduced by the amount received, if any under insurance from an insurer or reimbursed by employer
- Where the amount in respect of assessee who is dependent or a senior citizen, then Rs. 60,000 or actual expenditure whichever is less.
Deduction under this section shall be reduced by the amount received if any under insurance from an insurer, or reimbursed by an employer by an employer for the medical treatment of the person referred to above.
The following points shall be noted –
- For the purpose “Government hospital” includes a departmental dispensary (whether full time or part time) established and run by a department of the Govt. for the employees, a hospital maintained by a local authority and any other hospital with which arrangement have been made by the Govt. for the treatment of Govt. servants.
- The requirement are only of working in a Government hospital. It does not require employment in a Govt. hospital on regular basis. A surgeon rendering honorary service at a Govt. hospital is as such a surgeon working in a Govt. hospital – Snehlata C. ChandrakantChalisshazar v. Tmanvi 1999 Tax LR 759 (Guj.)
Reference: Section 80DDB of the Income Tax Act,1961
Deduction in respect of medical treatment, etc.
80DDB. Where an assessee who is resident in India has, during the previous year, actually paid any amount for the medical treatment of such disease or ailment as may be specified in the rules made in this behalf by the Board—
(a) for himself or a dependant, in case the assessee is an individual; or
(b) for any member of a Hindu undivided family, in case the assessee is a Hindu undivided family,
the assessee shall be allowed a deduction of the amount actually paid or a sum of forty thousand rupees, whichever is less, in respect of that previous year in which such amount was actually paid :
Provided that no such deduction shall be allowed unless the assessee furnishes with the return of income, a certificate in such form, as may be prescribed, from a neurologist, an oncologist, a urologist, a haematologist, an immunologist or such other specialist, as may be prescribed, working in a Government hospital :
Provided further that the deduction under this section shall be reduced by the amount received, if any, under an insurance from an insurer, or reimbursed by an employer, for the medical treatment of the person referred to in clause (a) or clause (b) :
Provided also that where the amount actually paid is in respect of the assessee or his dependant or any member of a Hindu undivided family of the assessee and who is a senior citizen, the provisions of this section shall have effect as if for the words “forty thousand rupees”, the words “sixty thousand rupees” had been substituted.
Explanation.—For the purposes of this section,—
(i) “dependant” means—
(a) in the case of an individual, the spouse, children, parents, brothers and sisters of the individual or any of them,
(b) in the case of a Hindu undivided family, a member of the Hindu undivided family,
dependant wholly or mainly on such individual or Hindu undivided family for his support and maintenance;
(ii) “Government hospital” includes a departmental dispensary whether full-time or part-time established and run by a Department of the Government for the medical attendance and treatment of a class or classes of Government servants and members of their families, a hospital maintained by a local authority and any other hospital with which arrangements have been made by the Government for the treatment of Government servants;
(iii) “insurer” shall have the meaning assigned to it in clause (9) of section 2 of the Insurance Act, 1938 (4 of 1938);
(iv) “senior citizen” means an individual resident in India who is of the age of sixty-five years or more at any time during the relevant previous year.
Specified diseases and ailments for the purpose of deduction under section 80DDB.
11DD. (1) 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,—
(a) Dementia ;
(b) Dystonia Musculorum Deformans ;
(c) Motor Neuron Disease ;
(d) Ataxia ;
(e) Chorea ;
(f) Hemiballismus ;
(g) Aphasia ;
(h) Parkinsons Disease ;
(ii) Malignant Cancers ;
(iii) Full Blown Acquired Immuno-Deficiency Syndrome (AIDS) ;
(iv) Chronic Renal failure ;
(v) Hematological disorders :
(i) Hemophilia ;