Understanding Section 80DDB: Medical Treatment of Specified Diseases
Medical expenses are a significant burden for many families in India. Fortunately, the government provides some relief through various tax deductions, including Section 80DDB. This section offers tax benefits to people who incur medical expenses on the treatment of specific diseases. In this article, we will understand Section 80DDB in detail and how it works.
Introduction
Medical expenses can put a dent in our finances. To alleviate some of the financial burden, the government has introduced various tax deductions, including Section 80DDB. This deduction helps taxpayers claim tax benefits on the money spent on the treatment of specific diseases. It’s essential to understand the nuances of this section to claim the tax benefits legitimately. In this article, we will delve into the details of Section 80DDB to help you understand it better.
What is Section 80DDB?
Section 80DDB of the Income Tax Act of India offers tax benefits to taxpayers for the medical treatment of specific diseases. The section allows you to claim a deduction on the expenses incurred on the treatment of yourself, your spouse, parents, children, or dependent siblings.
Which Diseases are covered under Section 80DDB?
The section covers specific diseases that require expensive medical treatment. These diseases are broadly classified under the following categories:
– Neurological diseases – Parkinson’s Disease, Dementia, Aphasia, Motor Neuron Disease, Ataxia, Chorea, Hemiballismus, and Creutzfeldt-Jakob disease.
– Malignant Cancer
– Chronic Renal failure
– Hematological disorders – Hemophilia, Thalassemia, and Aplastic anemia
– AIDS/HIV
– Any other disease or ailment specified by the Board of Direct Taxes.
The treatment for these diseases can be costly, and Section 80DDB provides much-needed relief in the form of tax deductions.
How much Tax Deduction can you claim under Section 80DDB?
The amount of tax deduction depends on the age of the person undergoing treatment and the type of disease. For people who are below 60 years of age, the maximum amount of deduction is Rs. 40,000. For people who are above 60 years of age, the maximum amount of deduction is Rs. 1,00,000. The deduction is allowed on the actual amount paid for treatment or the amount specified by the Board of Direct Taxes, whichever is less.
For example, if you spend Rs. 50,000 on the treatment of your mother’s chronic renal failure, you can claim a tax deduction of Rs. 40,000 (the actual amount paid) under Section 80DDB. However, if you spend Rs. 1,50,000, you can only claim a deduction of Rs. 1,00,000 (the maximum limit for people above 60 years of age).
How to claim Tax Deduction under Section 80DDB?
To claim tax deduction under Section 80DDB, you need to follow the below steps:
1. Collect all the bills and receipts related to the medical treatment of the specified diseases.
2. Obtain a prescription from a specialist doctor specifying the name of the patient, the disease treated, and the amount of money spent.
3. Submit the bills, receipts, and prescriptions to the Income Tax Department while filing your Income Tax Return.
Conclusion
The government has provided various tax deductions to help taxpayers save money on medical expenses. Section 80DDB is one such deduction that covers specific diseases requiring expensive medical treatment. Claiming the deduction is easy, provided you have the necessary bills, receipts, and prescriptions. It’s crucial to understand the nuances of Section 80DDB to claim the tax benefits legitimately. We hope this article has helped you understand Section 80DDB better and save money on medical expenses.
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