Navigating section 80DDB A comprehensive guide to claiming deductions

image

26 Jul 2023

Learn how to save on income tax by claiming deductions under section 80DDB of the Income Tax Act. This comprehensive guide from Kotak General Insurance has got you covered!

Are you looking for ways to curtail your income tax liability? Old tax laws allow you to claim deductions for investing or spending money. One such provision is section 80D of the Income Tax Act, where you can claim a tax benefit for paying health insurance premiums. Similarly, you can also claim tax deductions for expenses made to treat a specific illness, as per section 80DDB.

Here, we will shed light on how to save income tax by claiming this subsection of the IT Act. Read on to learn more.

What is section 80DDB of the Income Tax act?

Section 80DDB of the Income Tax (IT) Act is a tax deduction provision that allows individuals to deduct tax medical expenses for treating certain diseases or disorders. Depending on the individual's age and the type of illness, the tax deduction amount varies. This part applies to salaried and self-employed individuals, and the expenses can be for oneself, a spouse, dependent parents, or children. Both inpatient and outpatient treatment are eligible for the deduction.

Eligibility for section 80DDB

Under the Income Tax Act - Section 80DDB, individual taxpayers may claim deductions for medical expenses incurred for specific diseases or conditions. The taxpayer or a dependent, such as a spouse, child, or parent, can be eligible. For individuals under the age of 65, the maximum deduction isRs.40,000 (Rs. 1 lakh for those aged 65 and over).

Medical conditions allowed under section 80DDB

The specified disorders and conditions for the purposes of section 80DDB deduction listed in Rule 11DD are as follows:

1. AIDS

2. Hematological disorders

3. Malignant cancers

4. Chronic renal failure

5. Neurological diseases

How to claim a deduction under section 80DDB?

Here are the steps you should follow to claim a deduction under 80DDB on health insurance plans:

Step 1: Keep a record of medical bills and receipts
The first step to claiming a deduction under Section 80DDB is to maintain a record of all relevant medical bills and receipts. This includes bills for medical treatment and diagnostic tests, as well as receipts for prescribed medicines. Make sure that the bills and receipts are in the name of the patient for whom the medical expenses were incurred.

Step 2: Fill out the tax return form
Fill out the tax return form with the necessary information. This includes the patient's name, age, and the type of specified disease or ailment for which the medical expenses were incurred.

Step 3: Determine the total amount of medical expenses incurred
Before claiming a deduction under Section 80DDB, you must determine the total amount of medical expenses incurred during the fiscal year, including expenses such as doctor's fees, hospital charges, and diagnostic tests.

Step 4: Claim the deduction on the tax return form
To claim the deduction, enter the total amount of medical expenses incurred under "Section 80DDB" on the tax return form. The maximum deduction that you can claim isRs.1,00,000 or the actual expenses, whichever is less.

Step 5: Submit the tax return form and supporting papers
After filling out the tax return form and claiming the deduction under Section 80DDB, submit the form along with any supporting papers to the Income Tax Department. Make sure to attach all the bills and receipts related to the medical expenses incurred.

Conclusion
Section 80DDB of the Income Tax (IT) Act is an essential provision for individuals to save money on medical expenses incurred for specific diseases or conditions. By claiming deductions under this section, taxpayers can offset the high cost of medical treatment and receive financial assistance from the government in their health insurance.

Related Blogs

Know About Tax deductions on Health Insurance
Securing health with a health protection plan
Cashless claims vs Reimbursement claims in Health Insurance


image
Team Kotak GIC

The content of this blog has been created and carefully reviewed by the esteemed team at Kotak General Insurance, with the sole purpose of providing valuable guidance and sharing insights on the importance of general insurance. Our objective is to assist users in making informed decisions when purchasing or renewing insurance policies for their cars, bikes, and health. Our expertly curated information aims to empower our readers with the knowledge they need to protect their valuable assets and financial interests.