Tax benefit of expenses on medical treatment of specified diseases

By | June 10, 2016
(Last Updated On: June 10, 2016)

Deduction in respect of expenditure on medical treatment of specified diseases [Section 80DDB]

Tax benefit of Expenses on medical treatment of specified diseases

As per section 80DDB of Income Tax Act , a taxpayer can claim deduction in respect of expenditure incurred by him on medical treatment of specified diseases. The provisions in this regard are as follows:

What are the ” specified diseases or ailments ” for claiming tax benefit of expenses on medical treatment of specified diseases ?

specified diseases or ailments are defined in Rule 11DD as follow :-

11DD (1) For the purposes of section 80DDB, the following shall be the eligible diseases or ailments :

(i)           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 ;

(ii)          Malignant Cancers ;

(iii)         Full Blown Acquired Immuno-Deficiency Syndrome (AIDS) ;

(iv)         Chronic Renal failure ;

(v)          Hematological disorders :

(i)           Hemophilia ;

(ii)          Thalassaemia.

Who should issue prescription of ” specified diseases or ailments ” for claiming tax benefit of expenses on medical treatment of specified diseases ?

The prescription in respect of the diseases or ailments specified shall be issued by the following specialists:—

(a)          for 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 ;

 – a Neurologist having a Doctorate of Medicine (D.M.) degree in Neurology or any equivalent degree, which is recognised by the Medical Council of India;

(b)          for Malignant Cancers – an Oncologist having a Doctorate of Medicine (D.M.) degree in Oncology or any equivalent degree which is recognised by the Medical Council of India;

(c)          for Full Blown Acquired Immuno-Deficiency Syndrome (AIDS) ; – any specialist having a post-graduate degree in General or Internal Medicine, or any equivalent degree which is recognised by the Medical Council of India;

(d)          for Chronic Renal failure  – a Nephrologist having a Doctorate of Medicine (D.M.) degree in Nehprology or a Urologist having a Master of Chirurgiae (M.Ch.) degree in Urology or any equivalent degree, which is recognised by the Medical Council of India;

(e)          for  Hematological disorders :

(i)           Hemophilia ;

(ii)          Thalassaemia.

– a specialist having a Doctorate of Medicine (D.M.) degree in Hematology or any equivalent degree, which is recognised by the Medical Council of India :

where in respect of any diseases or ailments the patient is receiving the treatment in a Government hospital, the prescription may be issued by any specialist working full-time in that hospital and having a post-graduate degree in General or Internal Medicine or any equivalent degree, which is recognised by the Medical Council of India.

What should be mentioned in prescription of ” specified diseases or ailments ” for claiming tax benefit of expenses on medical treatment of specified diseases ?

The prescription shall contain the name and age of the patient, name of the disease or ailment along with the name, address, registration number and the qualification of the specialist issuing the prescription:

where the patient is receiving the treatment in a Government hospital, such prescription shall also contain the name and address of the Government hospital.

Is it necessary that prescription of  ” specified diseases or ailments ” should be issued by Government hospital ?

No it is not  necessary that prescription of  ” specified diseases or ailments ” should be issued by Government hospital .

However where in respect of any diseases or ailments the patient is receiving the treatment in a Government hospital, the prescription may be issued by any specialist working full-time in that hospital and having a post-graduate degree in General or Internal Medicine or any equivalent degree, which is recognised by the Medical Council of India.

where the patient is receiving the treatment in a Government hospital, such prescription shall also contain the name and address of the Government hospital.

Read Also Govt allows deduction under section 80DDB for treatment of disease on basis of certificate of private hospitals

Who can claim tax benefit of expenses on medical treatment of specified diseases ?

Deduction under section 80DDB can be claimed by an individual or a HUF, who is resident in India.

In case of an individual :expenditure should be incurred on medical treatment of an individual or wholly/mainly dependent spouse, children, parents, brothers and sisters of the individual;

 In case of a HUF :expenditure should be incurred on the medical treatment of any member of the family, who is wholly/mainly dependent on such HUF.

How much amount can be claimed as tax benefit of expenses on medical treatment of specified diseases ?

Amount of deduction will be lower of the following:

(a) amount actually paid on medical treatment specified above; or

(b) Rs. 40,000.

However, the limit of Rs. 40,000 will be increased to Rs. 60,000, if the expenditure is incurred on medical treatment of a senior citizen (i.e., any resident individual of age of 60 years or above but less than 80 years and to Rs. 80,000 if the expenditure is incurred on the medical treatment of super senior citizen i.e. resident individual of the age of 80 years or above).

Note : . From the amount of deduction computed in aforesaid manner, amount, if any, received by the taxpayer from any insurer or from his employer, by way of reimbursement for such expenditure shall be deducted.

Illustration

During the financial year 2015-16, Mr. Raja spent Rs. 1,00,000 on medical treatment of specified diseases of his brother (age 48 years) who is wholly dependent on him. He received Rs. 25,000 by way of reimbursement of such expenditure from a medical insurance policy. Can he claim any deduction in respect of expenditure incurred by him on medical treatment of specified diseases?

In this case, all the conditions of section 80DDB are satisfied and hence, Mr. Raja can claim deduction under section 80DDB. Deduction under section 80DDB will come to Rs. 15,000 (i.e., Rs. 40,000 maximum limit of deduction – Rs. 25,000 reimbursement from a medical insurance policy).

If his brother is a senior citizen (i.e. resident and of the age of 60 years of above but less than 80 years), then the amount of deduction will be Rs. 35,000 (i.e., Rs. 60,000 maximum limit of deduction – Rs. 25,000 reimbursement).

Suppose in above case, the amount received from insurance policy is Rs. 65,000 instead of Rs. 25,000, then the amount of deduction will be NIL (in both the situations), since the amount of reimbursement exceeds the maximum amount of deduction i.e., Rs. 40,000 or Rs. 60,000, as the case may be.

Related Post

 

 

Direct Taxes Ready Reckoner Service Tax Ready Reckoner Company Law Ready Reckoner tax deduction at source
New Books Released on Tax , GST and law

One thought on “Tax benefit of expenses on medical treatment of specified diseases

  1. Pingback: Tax benefit of medical / training expenses of person with disability | Tax Heal

Leave a Reply