As per section 80DDB, a taxpayer can claim deduction in respect of expenditure incurred by him on medical treatment of specified diseases.
Conditions are as below:
1) Deduction under section 80DDB can be claimed by an individual or a HUF, who is resident in India.
2) Deduction is available in respect of amount actually paid by the taxpayer on medical treatment of specified disease or ailment (prescribed by the Board, see rule 11DD for prescribed disease or ailment).
3) In case of an individual, the aforesaid expenditure should be incurred on medical treatment of an individual or wholly/mainly dependent spouse, children, parents, brothers and sisters of the individual; and
4) In case of a HUF, expenditure should be incurred on the medical treatment of any member of the family, who is wholly/mainly dependent on such HUF. The tax payer has to obtain the prescription for the medical treatment from a neurologist, an oncologist, a urologist, a haematologist, an immunologist or such other specialist, as may be prescribed.
Amount of deduction
Amount of deduction will be lower of the following:
(a) amount actually paid on medical treatment specified above; or
(b) Rs. 40,000.
However, the limit of Rs. 40,000 will be increased to Rs. 1,00,000, if the expenditure is incurred on medical treatment of a senior citizen (i.e., any resident individual of age of 60 years or above.
Important points
1. The taxpayer should obtain a copy of certificate (Form No. 10-I) issued by a neurologist, an oncologist, a urologist, a haematologist, an immunologist or such other specialist, as may be prescribed, working in a Government hospital.
From the amount of deduction computed in aforesaid manner, amount, if any, received by the taxpayer from any insurer or from his employer, by way of reimbursement for such expenditure shall be deducted.
Example:
During the financial year 2023-24, Ram spent Rs.1,00,000 on medical treatment of specified diseases of his brother (age 48 years) who is wholly dependent on him. He received Rs. 25,000 by way of reimbursement of such expenditure from a medical insurance policy. Can he claim any deduction in respect of expenditure incurred by him on medical treatment of specified diseases?
In this case, all the conditions of section 80DDB are satisfied and hence, Ram can claim deduction under section 80DDB. Deduction under section 80DDB will come to Rs. 15,000 (i.e., Rs. 40,000 maximum limit of deduction – Rs. 25,000 reimbursement from a medical insurance policy).
If his brother is a senior citizen (i.e. resident and of the age of 60 years of above), then the amount of deduction will be Rs. 75,000 (i.e., Rs. 1,00,000 maximum limit of deduction – Rs. 25,000 reimbursement).
Suppose, in above cases, the amount received from insurance policy is Rs. 65,000 instead of Rs.25,000, then: In First situation, the amount of deduction will be nil, since the amount of reimbursement exceeds the maximum amount of deduction i.e., Rs. 40,000. In Second situation, the amount of deduction will be Rs. 35,000 (i.e., Rs. 1,00,000 maximum amount of deduction minus Rs. 65,000 reimbursement)
Join our Practical Income Tax, ITR & TDS Course:
with lifetime validity: https://cagurujiclasses.com/courses/practical-course-income-tax-itr-tds/
With limited validity: https://studywudy.com/courses/incometax/
