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.)
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