One can avail deduction for expenses on account of medical treatment of himself or any of his dependents in case of some specified diseases like AIDS, cancer, neurological disorders, etc. under Section 80DDB of the Income Tax Act.
Meaning of the term “dependent”:
“Dependant” of an employee means and includes an individual, his or her spouse, children, parents, siblings who are dependant wholly or partly upon the employee for his or her maintenance.
How can one claim such deduction?
To claim deduction under section 80DDB of the Income Tax Act, one needs to submit Form 10-1 from a doctor of a government hospital in India being a specialist confirming the treatment of the ailment.
In case of disability one requires to file a copy of the disability certificate issued by the government medical board to avail such deduction.
Deduction under section 80DDB of the Income Tax Act cannot be allowed by an employer while computing the TDS. An assessee has to apply for availing such deduction at the time of filing his income tax return.
What is meant by “Government hospital”?
“Government hospital” includes a dispensary either full-time or part-time set up and run by a Government Department for the medical treatment of the Government servants and their family members, a hospital maintained by any local authority and any other hospital maintained by the Government for the treatment of its servants.
Diseases covered by the section:
The diseases covered by section 80DDB for the purpose of deduction are Dementia, Parkinson’s disease, Cancer, AIDS, Renal failure, Thalassaemia, etc.
Who can claim such deduction?
An individual or a HUF who is a resident in India can claim deduction under Section 80DDB of the Income Tax Act.
Can a NRI claim such deduction?
A Non Resident Indian (NRI) cannot claim deduction under Section 80DDB of the Income Tax Act.
Expenses eligible for deduction under Section 80DDB:
Expenses for the medical treatment and post treatment nursing, rehabilitation of a patient who is a dependent as well as the sum paid towards Life Insurance Corporation or any other insurer for a medical insurance for such dependant are covered by the section.
The amount of deduction:
The deduction that can be availed under Section 80DDB of the Income Tax Act is Rs. 50,000/- in case the disabled dependant does not suffer from any severe disability. On the other hand, the deduction amounts up to Rs. 1, 00,000/- if the disability is a severe disability.
Does deduction depend upon the actual expenses?
Deduction under Section 80DDB does not depend upon the actual amount of expenses incurred. Even if the expenses are less than the amount stated above, one shall get full deduction.