Tax Benefits under Section 80DDB

Section 80 DDB for Treatment of Specified diseases

Costs incurred for treatment of specified illnesses, could fetch you a tax benefit under section 80DDB.

• The deduction is available for individual assesses less than 65 years of age, a deduction limit of Rs. 40,000 is applicable. For a senior citizen, the limit is Rs. 60,000.

• Deduction is applicable for treatment of self, spouse, children, siblings, and parents, wholly dependent on you.

Diseases covered

a) Neurological Diseases (where the disability level has been certified as 40% or more).

b) Parkinson’s Disease

c) Malignant Cancers

d) Acquired Immune Deficiency Syndrome (AIDS)

e) Chronic Renal failure

f) Hemophilia

g) Thalassaemia

Eg:

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.)

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) .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.)