Dermatophytosis is one of the leading causes of visits to the Dermatology department, especially in India, where the hot and humid climate favours fungal acquisition and perpetuation. Usual modalities of treatment include the use of either oral or topical antifungals or a combination of both, depending upon the severity and extent of infection as well as the type of causative organism. But lately, steroid-modified dermatophytosis, an iatrogenically perpetuated dermatophytosis caused by the indiscriminate use of topical corticosteroids has emerged as a troublesome pandemic. We planned a cost-of-illness analysis of superficial dermatophytosis assessing the direct costs of dermatophytosis treatment borne by the health system, comparing the direct costs in steroid-naïve and steroid modified dermatophytosis. In our study, the average total cost of treatment for steroid naïve and steroid-modified dermatophytosis was found to be Rs 2172.41 and Rs 3770.60 respectively meaning that the patients who used topical steroids spend additional 40% on an average for treatment, when compared to steroid-naïve patients. The need for more consultations, investigations (considering the atypical presentations) and extended duration of treatment with higher antifungals were found to contribute to the increased financial burden in steroid-modified dermatophytosis.