The Income Tax Act, 1961 provides for a tax deduction on the treatment of certain serious diseases and conditions under Section 80DDB. The section lists each disease and the available deductions for each. 

You can claim a deduction from tax under Section 80DDB for ailments such as cancer, dementia, aphasia, ataxia, Parkinson’s, renal failure, dystonia musculorum deformans, AIDS and haematological disorders. 

The deduction under this section can only be availed on providing a medical certificate which lists the disease, its extent and certifies that the treatment has actually taken place. This certificate is called Form 10-I which is a certificate issued by the doctor who attests that the individual in consideration is ailing from one of the above-listed ailments and that he is liable to receive the tax deduction as specified under the Income Tax Act. 

In terms of the deduction allowed, individuals can claim up to ₹40,000 while senior citizens and super citizens can claim up to ₹1,00,000 or actual expenses, whichever is less. This was stated in the Budget 2018, which increased the limits from ₹ 60,000 and ₹80,000 for senior citizens and super senior citizens respectively to ₹1,00,000. It is important to note that the tax deduction allowed under this section will be considered only after deducting the insurance company’s payout. If the insurance company has covered the costs, then no deduction will be allowed from income. 

For availing the deduction, it is essential to remember that the certificate must come from an expert doctor specialising in the field of that ailment. Additionally, the certificate must have the following information: 

  • Name
  • Address
  • Disease/ailment name
  • Extent of disability
  • Registration number; and
  • Qualification of the medical practitioner

It is also provided in the law that the individual can claim the deduction for himself or his dependent spouse, parents or children under this section. The process for claiming the deduction involves fulfilling the document requirements such as the Form 10-I certificate and providing it to the IT Department while filing returns. Additionally, one must remember to keep all medical documentation as a record for the future, in case the IT Department asks for the same.