Understanding Section 80DDB: Tax Benefits for Specific Medical Expenses

Section 80DDB of the Income Tax Act offers a valuable tax deduction for individuals incurring expenses on the treatment of specified illnesses. This provision allows deductions for medical treatment costs for dependents suffering from certain diseases. Covered dependents include spouses, children, parents, and siblings.

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Here are five key points about Section 80DDB:

1. Eligible Diseases: Section 80DDB provides coverage for medical expenses related to specific diseases, including cancer, dementia, motor neuron diseases, Parkinson’s disease, AIDS, chronic renal failure, and more.
2. Who Can Claim: The deduction under Section 80DDB is available to both individuals and Hindu Undivided Families (HUFs). It is specifically extended to Resident Indians.
3. Deduction Limits: For patients under 60 years of age, the deduction is capped at Rs 40,000 or the actual amount spent, whichever is lower. For patients aged 60 and above, the limit increases to Rs 1 lakh or the actual amount paid, whichever is lower.
4. Insurance Adjustments: If the patient has insurance coverage, any reimbursement from the insurer or payments made by an employer must be deducted from the total medical expenses to calculate the eligible deduction.
5. Documentation Requirements: To claim the deduction under Section 80DDB, it’s essential to maintain accurate records, including prescriptions, bills, and receipts. Additionally, taxpayers must comply with relevant tax regulations and obtain the necessary certificate to claim this deduction on their income tax return.

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Taxpayers should ensure they have the required documentation and certification when claiming this deduction, especially if their dependents are suffering from the specified illnesses covered under Section 80DDB.