Healthcare expenses, especially those related to critical illnesses, can take a significant toll on a family’s finances. Recognizing this burden, the Income Tax Act, 1961, under Section 80DDB, offers relief to taxpayers who incur medical expenses on treatment of certain specified diseases. This provision helps reduce the tax burden by allowing deductions for expenses incurred on self or dependent family members.
In this article, we explore the conditions precedent that must be fulfilled to claim a deduction under Section 80DDB, the list of eligible diseases, quantum of deduction, legal documentation required, and who qualifies for this benefit. A simple mnemonic at the end will help you remember all the conditions with ease.
What is Section 80DDB?
Section 80DDB of the Income Tax Act, 1961 provides a tax deduction for medical treatment expenses incurred for specified diseases or ailments, as prescribed by the government. This section applies to individuals and Hindu Undivided Families (HUFs) who are residents in India.
The diseases must be certified by a specialist and treatment must be for the taxpayer or a dependent. The deduction helps mitigate the financial impact of high-cost medical care.
Who Can Claim Deduction under Section 80DDB?
The following categories are eligible:
- Resident Individuals
- Taxpayer himself/herself
- Dependent family members (spouse, children, parents, and siblings)
- Hindu Undivided Family (HUF)
- For any member of the HUF who is undergoing treatment for a specified disease
Non-resident Indians (NRIs) are not eligible for deduction under this section.
Specified Diseases and Ailments Covered
The diseases eligible under Section 80DDB are listed in Rule 11DD of the Income Tax Rules. These include:
- Neurological diseases (where disability level is 40% or more), such as:
- Dementia
- Dystonia musculorum deformans
- Motor neuron disease
- Ataxia
- Chorea
- Hemiballismus
- Aphasia
- Parkinson’s disease
- Malignant cancers
- Full-blown Acquired Immuno-Deficiency Syndrome (AIDS)
- Chronic renal failure
- Hematological disorders such as:
- Hemophilia
- Thalassemia
Only treatment for these conditions qualifies for the deduction.
Quantum of Deduction under Section 80DDB
The amount of deduction depends on the age of the person undergoing treatment:
| Category | Deduction Limit |
|---|---|
| Below 60 years of age | ₹40,000 or actual expenses, whichever is less |
| Senior citizens (60–79 years) | ₹1,00,000 or actual expenses, whichever is less |
| Super senior citizens (80+ years) | ₹1,00,000 or actual expenses, whichever is less |
Important Note: Any amount reimbursed by an insurance company or employer must be deducted from the total deduction claimed under Section 80DDB.
Conditions Precedent for Claiming Deduction
To successfully claim deduction under Section 80DDB, the following conditions must be strictly complied with:
1. Treatment Must Be for a Specified Disease
Only the diseases listed under Rule 11DD of the Income Tax Rules qualify for the deduction. Treatment for other conditions will not be eligible.
2. Treatment Must Be for Self or Dependent
The deduction is available only if the expenditure is incurred for:
- The assessee (self)
- Spouse
- Children
- Parents
- Siblings (brother/sister) who are wholly or mainly dependent on the taxpayer
3. Resident Status
Only resident individuals or HUFs are eligible. Non-residents are not entitled to this deduction.
4. Obtain a Medical Certificate (Form 10-I)
A prescribed certificate from a specialist doctor working in a government hospital is mandatory. This certificate must:
- Be issued in Form 10-I (as per earlier rules, now replaced with general certificate as per Rule 11DD)
- Be signed by a specialist doctor in the relevant field
- Be from a government hospital or institution
For example:
- Neurologist for neurological diseases
- Oncologist for cancer
- Nephrologist for renal failure
- Hematologist for blood disorders
5. Actual Expenditure Must Be Incurred
The deduction is only allowed on actual medical expenses incurred. It is not available on a notional basis.
6. Deduct Insurance or Employer Reimbursement
If any amount is received from medical insurance or employer, such amount must be subtracted from the deduction claimed.
7. Maintain Records and Bills
Although these are not submitted with the ITR, the taxpayer must retain medical bills, prescriptions, reports, and the certificate in case of scrutiny or assessment by the Income Tax Department.
Documentation Required
To ensure compliance and smooth processing, the following documents are needed:
- Certificate from a Specialist Doctor in prescribed format
- Medical bills and prescriptions
- Hospital discharge summaries, lab reports
- Proof of payment (cash or bank transaction)
- PAN card and ID proof of the taxpayer and the patient (if different)
- Health insurance reimbursement statements, if applicable
Claiming Deduction in Income Tax Return (ITR)
- Claim under Chapter VI-A > Section 80DDB
- Provide details of:
- Name and age of the person treated
- Relationship to taxpayer
- Disease name
- Amount incurred
- Amount reimbursed
- Net deduction claimed
Ensure all data is correctly reflected in your ITR form.
Summary of Conditions Precedent
| Condition | Requirement |
|---|---|
| Disease type | Must be specified in Rule 11DD |
| Relationship | Self or wholly dependent family member |
| Residency | Must be a resident individual or HUF |
| Medical Certificate | Issued by a specialist in a government hospital |
| Actual Expense | Deduction based on real expenses incurred |
| Insurance reimbursement | Deducted from total claim |
| Document retention | Bills, reports, and certificate to be kept safely |
Mnemonic to Remember – “SURE-MEDIC”
Use this mnemonic “SURE-MEDIC” to remember the key conditions under Section 80DDB:
- S – Specified disease (as per Rule 11DD)
- U – Undergone by self or dependent
- R – Resident status of the taxpayer
- E – Expenses must be actual, not estimated
- M – Medical certificate from government specialist
- E – Expenditure claimed minus insurance reimbursement
- D – Dependent relationship clearly defined
- I – Insurance deduction mandatory if applicable
- C – Certificate & bills to be retained for scrutiny
This simple phrase makes it easier to recall the 80DDB conditions during exams, return filing, or advisory work.
