Section 80DDB

Section 80DDB of the Income-tax Act allows an Indian taxpayer to claim a deduction for medical expenditure incurred on the treatment of specified diseases, either for themselves or for a defined dependent (spouse, children, parents, brothers, or sisters who are wholly or mainly dependent on the taxpayer). The deduction is available only under the old tax regime; the new regime under Section 115BAC removed it. The list of specified diseases is notified in Rule 11DD of the Income-tax Rules and includes neurological diseases (Parkinson's disease, motor neuron disease, dystonia musculorum deformans, ataxia, chorea, hemiballismus, aphasia, dementia) where the disability is certified at 40% or more, malignant cancers, full-blown AIDS, chronic renal failure, and haematological disorders such as haemophilia and thalassaemia.

The ceiling is ₹40,000 per year for a taxpayer below 60, and ₹1,00,000 per year if the patient (the taxpayer or the dependent) is 60 or older. Crucially, Section 80DDB requires the taxpayer to first reduce the medical expenditure by any amount received from an insurer or reimbursed by an employer for the same treatment — only the net out-of-pocket cost qualifies for deduction. This anti-double-benefit rule is what links 80DDB tightly with health insurance: a hospitalisation that was substantially covered by a health policy will leave only a small residual eligible for 80DDB.

Worked example: Ramesh, 58, incurs ₹3,80,000 of expenditure on his 78-year-old mother's chronic kidney failure dialysis over the financial year. His health policy reimbursed ₹2,30,000 of the costs. The net out-of-pocket is ₹1,50,000.

Because the patient is a senior citizen, the 80DDB ceiling is ₹1,00,000 — Ramesh deducts ₹1,00,000 from his taxable income, saving roughly ₹31,200 at his 31. 2% slab. The remaining ₹50,000 of out-of-pocket cost is not deductible.

A common misconception is that any medical expense qualifies. Only the diseases notified under Rule 11DD do, and the taxpayer must obtain a prescription from a specialist (a neurologist, an oncologist, a urologist, or an immunologist as applicable) certifying the diagnosis in the format prescribed by the Income-tax Rules. Generic medical bills without a specialist's certificate can be challenged at scrutiny.

Another common misconception is that 80DDB and 80D are alternatives for the same expense. They are not — 80D covers health insurance premiums and preventive check-ups, while 80DDB covers actual medical expenditure on specified diseases. A taxpayer can and should claim both in the same year if both apply, on different underlying spends.

Related: section-80d, section-80c, section-10-10d.