According to data published in The Hindu Business Line, medical inflation in India has surged over 8% after the second wave of COVID 19. This makes medical treatment even more important than it already is.
Now, if you have a person with special needs at home, it is even more difficult to make ends meet. Hence, to alleviate financial burden on taxpayers, the Income Tax Act allows a deduction for the expenses actually incurred on the treatment of specified ailments pertaining to self and dependents.
Here’s a complete breakdown of the section 80DDB deductions
that you can claim:
Who is eligible to claim a deduction of section 80DDB of Income Tax Act?
This deduction of section 80DDB of Income Tax Act
can be claimed by:
- Every individual, for the treatment of self, spouse, children, parents, brothers, sisters.
- A Hindu Undivided Family (HUF) for the treatment of all the members of its HUF.
This deduction can be claimed whether such individually is wholly or partly dependent on the taxpayer for their support or maintenance. Further, non-resident individuals are not eligible to claim this deduction. Thus, it is essential to keep in mind the residential status for claiming any deductions under this section. *
*Kindly visit the official Income Tax website for further details
How much deduction can be claimed under section 80DDB?
The maximum deduction you can avail under section 80DDB is based on two criteria — age and expenses. This amount is capped at:
- The actual amount paid for medical treatment; or
- An amount of ₹40,000 or ₹1,00,000 based on the age of the patient, whichever is lower.
The beneficiary’s age is what determines the maximum amount as senior citizen patients can claim up to ₹1,00,000 whereas other patients can only claim ₹40,000. *
*Note: Please note that tax benefit is subject to change in tax laws.
Few points to note about claiming a deduction under this section:
- The amount of deduction you can claim is based on the patient's age and is not based on the age of the taxpayer.
- The deductions are calculated based on the expenses incurred during the relevant financial periods.
- If the patient is covered by any insurance policy and any amount is paid by the insurer or the employer in this regard, the amount of deduction shall be lowered by such an amount which is paid by the insurance company.
* Standard T&C Apply
Which illnesses are specifically covered under section 80DDB?
An important thing to note is that this section allows a deduction for only certain specified ailments. Here is a list of those specified illnesses:
- Neurological diseases with a disability level of 40% or above include dementia, dystonia musculorum deformans, motor neuron disease, ataxia, chorea, hemiballismus, aphasia, and Parkinson’s disease.
- Malignant cancers
- Full blown acquired immuno deficiency syndrome (AIDS)
- Chronic renal failure
- Haematological disorders
* Standard T&C Apply
Note: Please note that tax benefit is subject to change in tax laws.
Did you know that health insurance plans
provide protection for critical ailments? While the above ailments are of severe nature, buying a health insurance cover helps to stay financially secured when seeking medical treatments. You no longer need to worry about money at a time when medical treatment is your highest priority.
Further, family health insurance plans
also help to cover all your family members at once without having to manage several insurance policies. But, before buying any insurance cover, it is essential to understand what all it covers and the features of the policy. While many buyers may place emphasis on the premium, the features, inclusions, and exclusions are some considerations to keep in mind. A health insurance premium calculator
is a handy tool that aids in comparing different insurance covers based not only on premiums, but also its feature sets. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.