Section 80DDB

For example, a 45-year-old incurs ₹80,000 in medical expenses for a specified disease in FY 2024-25 and receives ₹30,000 from insurance. Since the maximum deduction for individuals under 60 is ₹40,000, the taxpayer can claim a ₹10,000 deduction under Section 80DDB (₹40,000 - ₹30,000).

If a senior citizen (aged 65) incurs the same expenses and gets the same reimbursement, the deduction increases to ₹70,000 (₹1,00,000 - ₹30,000).

Key Components

• Eligibility: Available to resident individuals and HUFs for themselves and their dependents.

• Specified Diseases: Includes cancer, AIDS, chronic renal failure, neurological disorders, and other diseases listed under Rule 11, DD.

• Deduction Limits (FY 2024-25):

  • Below 60 years: Up to ₹40,000 or the actual expense, whichever is lower.

  • 60 years and above: Up to ₹1,00,000 or the actual expense, whichever is lower.

• Adjustment for Reimbursement: The deduction is reduced by any reimbursements from insurance or employers.

• Documentation: A specialist doctor’s certificate, bills, receipts, and identity proof are required to claim the deduction.

Benefits

• Tax Savings: Reduces taxable income, offering substantial tax relief for high medical expenses.

• Financial Support: Eases the financial burden on families dealing with serious health conditions.

• Encourages Timely Treatment: Provides an incentive for early and adequate treatment of critical illnesses.

Challenges

• Limited Scope: Only specified diseases are covered; common illnesses are not eligible.

• Documentation Requirement: Requires detailed documentation, including a doctor’s certificate and proof of expenses.

• Partial Coverage: The deduction may not cover the full medical costs, especially if there is significant insurance reimbursement.

• Eligibility: Only resident Indians and HUFs can claim; non-residents are excluded.

Conclusion

Section 80DDB offers important tax relief for individuals facing high medical expenses due to specified serious illnesses. However, it comes with strict eligibility criteria, documentation requirements, and deduction limits. For FY 2024-25, it remains an essential provision for those undergoing treatment for critical conditions, providing targeted support in managing medical costs.