Section 80DDB (Deduction basis actual payment in case of Specified Diseases, to the extent not reimbursed under insurance policy)
If you incur any medical expenditure in respect of specified diseases on behalf of self or your dependent family members (i.e. spouse/children/parents/brother/sister), you can avail deduction upto 40K per FY (100K in case of Senior citizen). One can’t claim deduction in respect of any expenditure reimbursed by insurer or employer. You need to have a valid prescription issued by relevant medical specialist to claim this deduction. Specified diseases include Neurological Diseases (where disability => 40%), Malignant Cancers, Full blown AIDS, Chronic Renal failure, Hemophilia/Thalassaemia.
Section 80DD (Fixed deduction irrespective of actual expenditure in case of Specified disabilities)
If you are incurring medical expenditure for a disabled dependent (i.e your spouse/children/parents/brother/sister), you are entitled for a fixed deduction of 75K (in case disability is >40% but <80%) or 125K (in case disability >=80%). You need to have a valid disability certificate (in the prescribed format) issued by relevant medical authority to claim this deduction. Note that deduction under Sec. 80DD is not available for you if similar fixed deduction under 80U is claimed by disabled person in his IT return. Specified disability include blindness, low vision, leprosy cured person, Hearing impairment, Locomotor disability, Mental retardation, Mental illness, Autism, Cerebral palsy and multiple disability.
Unlike Section 80D, both of these deductions can’t be claimed by non-resident tax payers.