Find out how you can save tax under Section 80DD, 80DDB, and 80U for medical expenses

Here are some standard deduction options under Section 80DD, 80DDB, and 80U.

Find out how you can save tax for medical expenses

Most people are aware that a health insurance plan can help you save tax. The insurance premiums paid towards insurance plans for self, spouse, children, or parents qualify for tax deductions under Section 80D of the Income Tax Act, 1961. But did you know that you can also claim tax exemption for expenses incurred on medical treatment? Read on to know more.

Are medical expenses tax deductible?

Yes, medical expenses are tax deductible under various sections of the Income Tax Act, 1961. A medical condition can be taxing on your mental and physical health as well as your financial standing. And while health insurance plans help ease some of this pressure, you may still end up paying a significant amount from your own pocket. 

Thankfully, there are some tax-saving strategies, as mentioned below, that can help you save some money for the expenses incurred on yourself or a spouse, child, parent, brother, or sister. 

Section 80DD deduction

As per Section 80DD, resident individuals or HUFs (Hindu Undivided Families) can claim a standard deduction for a differently-abled dependent. Individuals can claim a tax exemption on the medical treatment of a differently-abled spouse, child, parent, brother, or sister as long as they are completely dependent on the individual for their needs. In the case of HUFs, the dependent person should be a member of the HUF. 

Tax deductions can be made on expenses like health check-up, nursing, training, rehabilitation, LIC schemes, etc., as per the following limits: 

  • You can claim up to Rs 75,000 if the disability is above 40% but less than 80%.
  • You can claim up to Rs 1,25,000 if the disability is above 80%.

Related: Deductions available under Section 80 of the Income Tax Act

Section 80DDB deduction

As per Section 80DDB, resident individuals or HUFs claim can claim tax deductions on medical expenses incurred on self or a dependent family member for certain diseases listed in the Act. Just like Section 80DD, Section 80DDB also covers a spouse, child, parent, brother, or sister who is dependent on you. For HUFs, the dependent person should be a member of the HUF. The diseases covered under the act include:

  • Malignant cancer
  • Neurological diseases
  • AIDS
  • Chronic renal failure
  • Haematological disorders

You can claim up to Rs 40,000 or the actual expenses incurred, whichever is less, for dependents below the age of 60. And you can claim the deduction of up to Rs 1,00,000 or the actual expenses incurred, whichever is less, for senior citizens aged 60 or more.

Section 80U deduction

Section 80U is similar to Section 80DD, but with one major difference. While Section 80DD deduction is for dependents, Section 80U is for medical expenses incurred on self. Resident individuals who suffer from at least 40% disability can claim a tax deduction under this section. The disability must be diagnosed and confirmed by certified medical authorities. 

The types of disabilities included and covered under the section include the following:

  • Blindness by 20 degrees of angle or lower or visual acuity lower than 6/60 with corrective lenses 
  • Poor vision that cannot be corrected by surgery 
  • Hearing power lower than 60 decibels
  • Mental retardation
  • Mental illness
  • Loss of sensation in hands or feet due to leprosy (now cured) or eye paresis
  • Locomotor disability 

You can claim up to Rs 75,000 if the disability is above 40% but less than 80%. And up to Rs 1,25,000 if the disability is above 80%.

Related: Tax exemptions you can get under section 80D

Differences between Section 80DD, 80DDB, and 80U

Point of difference

Section 80DD

Section 80DDB

Section 80U

Applicability

Applicable for people spending on medical bills of disabled dependents.

Applicable for people incurring expenses on the treatment of specific diseases listed in the act for self or dependent family members.

Applicable for people spending on medical expenses incurred due to disabilities suffered by self. 

Assessee

Resident individuals or HUFs who have disabled dependents with at least 40% disability. 

Resident individuals or HUFs who suffer from specific diseases themselves or have dependents who suffer from them.

Resident individuals who suffer from at least 40% disability.

Deduction amounts

  • Rs 75,000 if the disability is above 40% but less than 80%.
  • Rs 1,25,000 if the disability is above 80%.
  • Rs 40,000 or expenses incurred whichever is less for people below 60.
  • Rs 1,00,000 or the expenses incurred, whichever is less, for people aged 60 or above. 
  • Rs 75,000 if the disability is above 40% but less than 80%.
  • Rs 1,25,000 if the disability is above 80%

Last words

Now that you know the provisions of each of these sections, make sure to use them to your benefit when you file your taxes. It also helps to know how to plan your taxes for better savings. COVID-19: Medical expenses and conditions that your health insurance may not cover

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