Income Tax Benefits: When it comes to medical expenses, there are certain provisions under Section 80D and its sub-sections which allow taxpayers avail tax deduction benefits. While many are familiar with Section 80D, which offers tax rebates for health insurance premiums, fewer may know about Section 80DDB. What is the difference between Section 80D and 80DDB? Section 80D primarily encourages individuals to secure their health through insurance. Under Section 80D, every individual or HUF can avail a tax deduction benefit against medical insurance premiums paid during a particular financial year. While under Section 80DDB, one can claim tax deduction against expenses incurred on treatment of certain serious diseases like cancer, neurological diseases and chronic renal failure. Unlike Section 80D, which covers premiums for health insurance and preventive health check-ups, Section 80DDB offers deductions for expenses related to treatment of ailments. This targeted relief under Section 80DDB can significantly ease the financial burden of critical medical treatments. Pankaj Nawani, CEO of CarePal Secure, sheds light on the nuances of Section 80DDB and how it contrasts with the more commonly recognized Section 80D. Also read: ITR 2024: Tax refund delayed? Defective income tax return could be the reason | Here’s what you should do Section 80DDB is distinct from the more widely known Section 80D, which focuses on offering rebates for health insurance premiums paid for oneself and family members, including parents, he said adding that while Section 80D encourages individuals to secure their health through insurance, offering a rebate of up to Rs 1 lakh annually depending on age, Section 80DDB is designed to help individuals offset the costs of serious medical treatments by allowing deductions from the gross total income based on the expenses incurred for specific diseases. Which diseases qualify for tax deductions under Section 80DDB? The diseases that qualify for tax deductions under Section 80DDB are specified under Rule 11D of the Income Tax Act, Nawani mentioned. "These include a variety of serious conditions such as neurological diseases with a certified disability of 40% or more (examples include Parkinson’s disease, Motor Neuron Disease, and Dementia), malignant cancers, full-blown Acquired Immuno-Deficiency Syndrome (AIDS), chronic renal failure, and certain hematological disorders like hemophilia and thalassemia." Who is considered a dependent under Section 80DDB, making them eligible for these rebates? Under Section 80DDB, dependents eligible for these rebates include the taxpayer themselves, their spouse, dependent children, dependent parents, and dependent siblings, according to Nawani. The key criterion, he said, is that these dependents must rely on the taxpayer for financial support. Also read: ‘Outstanding tax demand of …’ makes you ineligible to travel overseas | Know all about Income Tax Clearance Certificate rules How much deduction is allowed under Section 80DDB, depending on age and other criteria? The deduction available under Section 80DDB depends on the age of the patient. Specifically, a taxpayer can claim the lower of the actual medical expenses incurred or up to Rs 40,000 if the patient is below 60 years of age. If the patient is 60 years or older, the maximum deduction increases to Rs 1 lakh. This tiered structure recognizes the increased healthcare costs often associated with aging, providing greater relief for older patients and their caregivers.
