Tax relief on caring for a disabled person (Part 2)

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In the last series, we discussed about Section 80DD. On similar lines, government has allowed other deductions as well. One such deduction is under section 80DDB, the details of which I have explained below. 

Section 80DDB: Deduction in respect of medical treatment, etc 

Who is eligible to avail this deduction? 
This deduction is available to the following persons: 
1. All resident individuals 
2. Resident Hindu Undivided Family (HUF) 

Who have actually paid any amount for the medical treatment of specified diseases or ailments for specified persons. 

In other words, expenditure for the medical treatment must be incurred during the relevant tax period to claim the deduction. 

Persons for whom medical expenses are to be incurred 

The expense should be incurred by: 
1. In case of an individual: the individual taxpayer either for himself or for any dependent  
2. In the case of a Hindu Undivided Family: the HUF for a dependent member of the HUF. 

What is meant by dependent? 

A Dependent means: 
1. In the case of an individual: the spouse, children, parents, brothers and sisters of the individual or any one of them 
2. In the case of a Hindu Undivided Family: a member thereof 

Amount of deduction allowed to be claimed: 
The taxpayer can claim a deduction of INR 40,000 or the actual amount incurred, whichever is less, in respect of that previous year in which such amount was actually incurred. 

Where any amount has been received from the insurer, or reimbursed by an employer, for the medical treatment, it has to be reduced accordingly. 

Amendment by Finance Act 2015: 
With effect from 1st April, 2016, for a taxpayer who is a senior citizen (i.e. person aged 60 years or more but less than 80 years), the deduction amount is INR 60,000 instead of INR 40,000. 

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For a taxpayer who is classified as a “very senior citizen” (i.e. person aged 80 years or more), the deduction amount is INR 80,000 instead of INR 40,000 

The certificate required, from a neurologist, an oncologist, a urologist, a haematologist, an immunologist or such other specialist, as may be prescribed, need not be from a Government hospital. 

Particulars AY 2016-17 (FY 2015-16) AY 2015-16 (FY 2014-15)
Where taxpayer is below the age of 60 years 4000040000
Where taxpayer is of age 60 years or more but less than 80 years 6000060000
Where taxpayer is of age 80 years or more 8000060000

Which diseases or medical ailments are specified under 80DDB: 

For the purpose of section 80DDB, the following are the eligible diseases or ailments that are covered under this section: 

1. Neurological Diseases where the disability level has been certified to be of 40% and above 

a. Dementia 
b. Dystonia Musculorum Deformans 
c. Motor Neuron Disease 
d. Ataxia 
e. Chorea 
f. Hemiballismus 
g. Aphasia 
h. Parkinsons Disease 

2. Malignant Cancers 
3. Full Blown Acquired Immuno-Deficiency Syndrome (AIDS) 
4. Chronic Renal failure 
5. Hematological disorders 

a. Hemophilia 
b. Thalassaemia 

Who can issue a certificate? 

  • For neurological diseases: A neurologist having a Doctorate of Medicine (D.M.) degree in neurology or any equivalent degree, which is recognized by the Medical Council of India 
  • For malignant Cancers: An oncologist having a Doctorate of Medicine (D.M) degree in Oncology or any equivalent degree, which is recognized by the Medical Council of India
  • For Chronic Renal Failure: A Nephrologist having a Doctorate of Medicine (D.M) degree in Nephrology or a Urologist having a Master of Chirurgiae (M. Ch.) Degree in Urology or any equivalent degree, which is recognized by the Medical Council of India
  • For Hematological disorders: A specialist having a Doctorate of Medicine (D.M) degree in Hematology or any equivalent degree, which is recognized by the Medical Council of India 
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Documentation: 
For claiming the tax deduction under this section, the taxpayer must acquire the prescription of the disease or ailment in Form 10 I from a specialist doctor confirming the treatment of the disease as specified in the rules. The relevant Income tax rule in this case is Rule 11DD which specifies the following: 

  • For those patients who are availing medical treatment at a privately owned hospital:
  1. The prescription can be from the same hospital and it is not mandatory to get the same from a government hospital
  2. It is mandatory that the certificate is acquired from a specialist who possesses a degree in his field of specialization that is validated from the Medical Council Of India
  • For those patients who are availing medical treatment at a government owned hospital:
  1. The prescription must be acquired by a specialist who is employed on a full-time basis at the hospital
  2. It is mandatory for the specialist in question to possess a general post-graduate degree or an internal medicine degree or similar, which is validated by the Medical Council of India 

Additionally, the following details are to be included in the certificate: 

  • The name of the patient
  • The age of the patient
  • The name of the ailment or the disease in question
  • Details of the specialist such as:
  1. Name
  2. Address
  3. Qualification
  4. Registration number
  • If treatment of the patient is taking place at a government owned hospital, then the name of the hospital as well as its address will have to be mentioned in the certificate 

Other conditions: 
1. No such deduction would be allowed unless the taxpayer obtains the prescription for such medical treatment from a neurologist, an oncologist, a urologist, a haematologist, an immunologist or such other specialist, as is discussed in the ensuing paragraphs 2. The taxpayer is not required to submit the certificate in the prescribed form to the Income Tax Department while furnishing the Income Tax Return. Instead, he must keep the certificate with himself unless asked by the income tax department to furnish the same before them.  

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