Deduction under section 80DDB with FAQ

1. Medical treatment of specified ailments under section 80DDB

Deductions of expenses on medical treatment of specified ailments (such as AIDS, cancer and neurological diseases) can be claimed under Section 80DDB. The maximum amount of deduction allowed from gross total income on condition that no medical reimbursement is received from any insurance company or employer for this amount. In case of reimbursement the amount paid should  be reduced by the amount received if any under insurance from an insurerer or reimbursed by an employer.

2. Amount of deduction under section 80DDB

Amount of deduction will be lower of the following:

a. mount actually paid on medical treatment specified above; or

b. or Amount as per Table below

3. Points to be kept in mind while claiming deduction under section 80DDB

Following important points should be kept in mind while claiming deduction under section 80DDB:

• Deduction under section 80DDB can be claimed by an individual or a HUF, who is resident in India.
• 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).
• For the purpose of this section in the case of an employee “dependant” means individual, the spouse, children, parents, brothers and sisters of the employee or any of them, dependant wholly or mainly on the employee for his support and maintenance.
• 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
• 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.
• In order to claim this deduction, however, you will have to submit Form 10-1 from a specialist doctor confirming the treatment of the disease. Up to A.Y. 2015-16 the Certificate was required only from a specialist Doctor working in a Government hospital but from A.Y. 2016-17 it is amended to provide any specialist doctor.
• 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.

Recommended Post- Budget 2015- Section 80DDB- Limit raised & relaxed condition of certificate

4. Specified diseases and ailments for the purpose of deduction under section 80DDB 

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 ;

(ii) Thalassaemia.

5. Frequently Asked Questions on deduction under section 80DDB 

Question – I am undergoing treatment for Cancer currently. Although these expenses are covered under my insurance policy, there is some parallel treatment recommended as preventive measures to control the spread of this disease. Since the parallel treatment (ovarian ablation and IVF treatment) is not covered in my insurance policy, I would have to shell out approximately 2 lakhs for this treatment. Can I avail of exemption in this case and to what extent?

Answer – Section 80DDB provides deduction for expense on cancer patients.Section 80DDB starts with following lines

Deduction in respect of medical treatment, etc.

80 DDB. 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 dependent, 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 :

So any amount of expenditure is covered u/s 80DDB. However the deduction is limited to maximum Rs 40,000 (which is Rs 60,000 in case patient is 60 years or above and Rs. 80,000/- for those above 80 Years from A.Y. 2016-17. This amount has been extended to Rs 1,00,000 for both senior citizen and super citizen from A.y 2019-20)

However the proviso to section 80DDB provides that if there is any insurance claim , then deduction shall be allowed by reducing the insurance amount received from expenditure incurred .

Read the proviso below

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) :

In nutshell computation of deduction is as under

Total expenditure xxxxx

Less Insurance claim xxxxx

Net Expenditure xxxxx

Net Expenditure allowed as deduction to the maximum of Rs 40,000 (Rs 60,000 in case of Sr. Citizen, Rs. 80,000/- in case of super senior citizen. This amount has been extended to Rs 1,00,000 for both senior citizen and super citizen from A.y 2019-20).Therefore , in your case , you can claim deduction despite getting the insurance claim upto Rs 40,000 (Rs 60,000 if you are of 60 years or more but less than 80 Years and Rs. 80,000/- in case of very senior citizen from A.Y. 2016-17 . This amount has been extended to Rs 1,00,000 for both senior citizen and super citizen from A.y 2019-20)

Question  –  During the financial year 2017-18, Mr. Raja 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?

Answer–   In this case, all the conditions of section 80DDB are satisfied and hence, Mr. Raja 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 but less than 80 years), then the amount of deduction will be Rs. 35,000 (i.e., Rs. 60,000 maximum limit of deduction – Rs. 25,000 reimbursement).

Suppose in above case, the amount received from insurance policy is Rs. 65,000 instead of Rs. 25,000, then the amount of deduction will be NIL (in both the situations), since the amount of reimbursement exceeds the maximum amount of deduction i.e., Rs. 40,000 or Rs. 60,000, as the case may be. However one should note that the amount of deduction has been extended to Rs 1,00,000 for both senior citizen and super citizen from A.y 2019-20)

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6. Extract of Rule 11D related to deduction under section 80DDB

[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 ;

(ii) Thalassaemia.

(2) The certificate in respect of the diseases or ailments specified in sub-rule (1) shall be issued by the following specialists working in a Government hospital—

(a)  for diseases or ailments mentioned in clause (i) of sub-rule (1) – a Neurologist having a Doctorate of Medicine (D.M.) degree in Neurology or any equivalent degree, which is recognised by the Medical Council of India;

(b)  for diseases or ailments mentioned in clause (ii) of sub-rule (1) – an Oncologist having a Doctorate of Medicine (D.M.) degree in Oncology or any equivalent degree which is recognised by the Medical Council of India;

(c)  for diseases or ailments mentioned in clause (iv) of sub-rule (1) – 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 or any equivalent degree, which is recognised by the Medical Council of India;

(d)  for diseases or ailments mentioned in clause (v) of sub-rule (1) – a specialist having a Doctorate of Medicine (D.M.) degree in Hematology or any equivalent degree, which is recognised by the Medical Council of India :

Provided that where in respect of any diseases or ailments specified in sub-rule (1), no specialist has been specified or where the specialist specified is not posted in the Government hospital in which the patient is receiving the treatment, such certificate, with prior approval of the Head of that hospital, may be issued by any other specialist working full-time in that hospital and having a post-graduate degree in General or Internal Medicine, which is recognised by the Medical Council of India.

(3) The certificate from the prescribed authority to be furnished along with the return of income shall be in Form No. 10-I.]

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Brief on Some of the eligible diseases or ailments

(a)  Dementia ; Dementia is a broad category of brain diseases that cause a long term and often gradual decrease in the ability to think and remember such that a person’s daily functioning is affected. Other common symptoms include emotional problems, problems with language, and a decrease in motivation. A person’s consciousness is not affected. For the diagnosis to be present it must be a change from a person’s usual mental functioning and a greater decline than one would expect due to aging. These diseases also have a significant effect on a person’s caregivers.

(b)  Dystonia Musculorum Deformans ; Dystonia is a neurological movement disorder, in which sustained muscle contractions cause twisting and repetitive movements or abnormal postures. The movements may resemble a tremor. Dystonia is often initiated or worsened by voluntary movements, and symptoms may “overflow” into adjacent muscles.

(c)  Motor Neuron Disease ; A motor neuron disease (MND) is any of five neurological disorders that selectively affect motor neurons, the cells that control voluntary muscle activity including speaking, walking, swallowing, and general movement of the body. They are neurodegenerative in nature, and cause increasing disability and, eventually, death. In the most common classification, the term “motor neuron disease” applies to the following five disorders which affect either upper motor neurons (UMN) or lower motor neurons (LMN), or both:

(d)  Ataxia ; Ataxia is a neurological sign consisting of lack of voluntary coordination of muscle `movements. Ataxia is a non-specific clinical manifestation implying dysfunction of the parts of the nervous system that coordinate movement, such as the cerebellum. Several possible causes exist for these patterns of neurological dysfunction. Dystaxia is a mild degree of ataxia.

(e)  Chorea ; Chorea (or choreia, occasionally) is an abnormal involuntary movement disorder, one of a group of neurological disorders called dyskinesias.  The term hemichorea refers to chorea of one side of the body, such as chorea of one arm but not both (analogous to hemiballismus).

(f)  Hemiballismus ; Hemiballismus, formerly called ballism, is a very rare movement disorder, caused in most cases by a decrease in activity of the subthalamic nucleus of the basal ganglia, resulting in the appearance of flailing, ballistic, undesired movements of the limbs. It can also appear rarely due to certain metabolic abnormalities. It is a rare movement disorder, being 500 times more rare than Parkinson’s disease. Hemiballismus can cause significant disability. Symptoms can decrease during sleep.

(g)  Aphasia ; Aphasia  is an acquired language disorder caused by damage to the brain. This class of language disorder ranges from having difficulty remembering words to losing the ability to speak, read, or write, but does not affect intelligence. This also affects visual language such as sign language. Aphasia is usually caused by brain damage, most commonly caused by stroke. Brain damage linked to aphasia can also be caused by other brain diseases, including cancer, epilepsy, and Alzheimer’s disease.

(h)  Parkinsons Disease ;Parkinson’s disease (PD, also known as idiopathic or primary parkinsonism, hypokinetic rigid syndrome/HRS, or paralysis agitans) is a degenerative disorder of the central nervous system. The motor symptoms of Parkinson’s disease result from the death of dopamine-generating cells in the substantia nigra, a region of the midbrain; the cause of this cell death is unknown. Early in the course of the disease, the most obvious symptoms are movement-related; these include shaking, rigidity, slowness of movement and difficulty with walking and gait. Later, thinking and behavioral problems may arise, with dementia commonly occurring in the advanced stages of the disease, whereas depression is the most common psychiatric symptom. Other symptoms include sensory, sleep and emotional problems. Parkinson’s disease is more common in older people, with most cases occurring after the age of 50.

Download From 10-1 to Claim Deduction under section 80DDB

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(Republished with amendments on 29.06.2018)

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