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Tuesday, 5 December 2017

Income Tax Deduction for Medical Treatment, With Automated TDS on Salary for Central & State Govt employees for F.Y.2017-18

Income Tax Act provides a deduction for expenses incurred by a taxpayer for medical treatment of specified disease or ailment under Section 80DDB. In this article, we look at Section 80DDB deduction in detail.

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Section 80DDB

Section 80DDB deduction is allowed from gross total income of an individual assessee for medical expenses incurred during the previous year for medical treatment of specified diseases. The deduction can be claimed for self or a dependent. Dependent means the spouse, children, parents, brothers and sisters of the individual or any of them dependant wholly or mainly on such individual for his support and maintenance.

Amount of Deduction under Section 80DDB

The maximum deduction provided under Section 80DDB is Rs.80,000 or amount spent, whichever is less for very senior citizens. The maximum deduction for senior citizens is Rs.60,000 or amount spent, whichever is less. The maximum deduction for regular taxpayers under Section 80DDB is Rs.40,000 or amount spent, whichever is less.

Eligible Deduction under Section 80DDB

For a deduction to be eligible under Section 80DDB, the taxpayer must obtain a prescription containing the following details from an authorised medical practitioner:
  • Name of Patient
  • Age of Patient
  • Name of disease or ailment
  • Name, address, registration number and qualification of Doctor issuing the prescription

Treatment Received from Government Hospital

If the taxpayer received the treatment in a government hospital, the prescription can be issued by any specialist working full-time in that hospital and having a post-graduate degree in General or Internal Medicine or an equivalent degree, which is recognised by the Medical Council of India. The prescription should also contain the name and address of the government hospital.

In addition to Section 80DDB deduction, taxpayers can also claim income tax deduction under Section 80D for medical and health insurance expense.

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