Raising the limit of deduction under section 80DDB

Under the existing provisions of section 80DDB of the Act, an assessee, resident in India is allowed a deduction of a sum not exceeding forty thousand rupees, being the amount actually paid, for the medical treatment of certain chronic and protracted diseases such as Cancer, full blown AIDS, Thalassaemia, Haemophilia etc. This deduction is allowed up to sixty thousand rupees where the expenditure is in respect of a senior citizen i.e. a person who is of the age of sixty years or more at any time during the relevant previous year.

The above deduction is available to an individual for medical expenditure incurred on himself or a dependant relative. It is also available to a Hindu undivided family (HUF) for such expenditure incurred on its members. Dependant in case of an individual means the spouse, children, parents, brother or sister of an individual and in case of an HUF means a member of the HUF ,wholly or mainly dependant on such individual or HUF for his support and maintenance.

Under the existing provisions of this section, a certificate in the prescribed form, from a neurologist, an oncologist, a urologist, a haematologist, an immunologist or such other specialist working in a Government hospital is required. It has been represented that the requirement of a certificate from a doctor working in a Government hospital causes undue hardship to the persons intending to claim the aforesaid deduction. Government hospitals at many places do not have doctors specialising in the above branches of medicine. For this and other reasons, it may be difficult for the taxpayer to obtain a certificate from a Government hospital.

In view of the above, it is proposed to amend section 80DDB so as to provide that the assessee will be required to obtain a prescription from a specialist doctor for the purpose of availing this deduction.

Further, it is also proposed to amend section 80DDB to provide for a higher limit of deduction of upto eighty thousand rupees, for the expenditure incurred in respect of the medical treatment of a “very senior citizen”. A “very senior citizen” is proposed to be defined as an individual resident in India who is of the age of eighty years or more at any time during the relevant previous year.

These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent assessment years.

[Clause 20]

NOTE ON RELEVANT CLAUSES  OF FINANCE BILL 2015

20. Amendment of section 80DDB.

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In section 80DDB of the Income-tax Act, with effect from the 1st day of April, 2016, — 5 (i) for the first proviso, the following proviso shall be substituted, namely:—

“Provided that no such deduction shall be allowed unless the assessee obtains the prescription for such medical treatment from a neurologist, an oncologist, a urologist, a haematologist, an immunologist or such other specialist, as may be prescribed.”.

(ii)      after the third proviso, the following proviso shall be inserted, namely:—

‘Provided also that where the amount actually paid is in respect of the assessee or his dependant or any member of a Hindu undivided family of the assessee and who is a very senior citizen, the provisions of this section shall have effect as if for the words “forty thousand rupees”, the words “eighty thousand rupees” had been substituted.’;

(iii)     in the Explanation,—

(a) clause (ii) shall be omitted;

(b) after clause (iv), the following clause shall be inserted, namely:—

‘(v) “very senior citizen” means an individual resident in India who is of the age of eighty years or more at any time during the relevant previous year.’

EXTRACT OF RELEVANT CLAUSES FROM FINANCE BILL 2015

Clause 20 of the Bill seeks to amend section 80DDB of the Income-tax Act relating to deduction in respect of medical treatment, etc.

The existing provisions contained in section 80DDB provide for a deduction to an assesse, being an individual or Hindu undivided family of an amount actually paid, for expenditure incurred for the medical treatment of the individual himself or a dependent or any member of a Hindu undivided family in respect of disease or ailment as specified in the rules. The deduction is limited to forty thousand rupees. The deduction in respect of a senior citizen is allowable up to sixty thousand rupees. The deduction is allowed only if the assessee furnishes with the return of income, a certificate in the prescribed form, from a neurologist, an oncologist, a urologist, a haematologist, an immunologist or such other specialist working in a Government hospital.

It is proposed to substitute first proviso to section 80DDB so as to provide that no such deduction shall be allowed unless the assessee obtains, a copy of the prescription for such medical treatment from a neurologist, an oncologist, a urologist, a haematologist, an immunologist or such other specialist as may be prescribed.

It is further proposed to provide that where the aforesaid amount actually paid is in respect of the assessee or his dependant or any member of a Hindu undivided family of the assessee, who is a very senior citizen, a deduction up to eighty thousand rupees would be allowed.

It is also proposed to omit the definition of the term “Government hospital” from the Explanation to the aforesaid section.

It is also proposed to insert a new clause in the Explanation of the aforesaid section so as to define the term ‘very senior citizen’ to mean an individual resident in India who is of the age of eighty years or more at any time during the relevant previous year.

These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016- 17 and subsequent assessment years.

( Compiled by Taxguru Team)

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22 responses to “Section 80DDB- Limit Raised & Relaxed Condition of Certificate”

  1. Sunil Shaligram says:

    In a family, two cancer patients, then under 80DDB how much is the deduction allowed able?

  2. MANMOHAN says:

    please help me my mother is unable to walk she can only walk 2 or 3 step with help walker is she come into locomotor disability.

  3. amol says:

    this all rubbish things by government. why only for specified disease. tax oncologist should be for any disease.

  4. C K Jangam says:

    Say the patient is having renal failure & gone through renal transplant. he has got tax benefit for transplant expenses. Patient requires medicines for lifetime.
    Did he get tax exemption for post transplant treatment expenses? & for how many years?

  5. Pravin says:

    Dear Sir,
    What is the limit of exemption for non senior citizen Indian and is the diseases like diabetes, blood pressure and cardiac related treatments are covered under this?

  6. Dinesh Chaudhary says:

    How to apply 80 DDB? do i need to submit certificate to any office?

  7. HB says:

    Dear Sir,

    Please clarify whether rheumatic arthritis is covered under 80 DDB or not?

  8. Vaibhav Pavtekar says:

    Does this provide any support for Highly expensive treatments of other disease as well?

    like, Hepatitis c. since this disease can cause lot of expense at various phase and many of insurer also do not cover all treatment.

  9. girish limaye says:

    my father is 83 years old and is suffering from diabetes . he had recently suffered from a foot injury for which he had been hospitalised and he had to undergo an amputation. will this expenditure qualify for deduction u/s 80DDB?
    he was treated in a private hospital.

  10. Sudheer says:

    Can some one confirm if treatment cost for CKD(Chronic Kidney Decease) patient who is under dialysis is covered under sec 80DDB and which document I need to submit to get the exemption with the bills ?

  11. p.k.padhy. says:

    Dear Sir, I am a retired Government employee(62 yrs).For past 7 to 8 years, i am suffering from Parkinson disease and under treatment. I understand that Parkinson disease is covered under exemptions provided under sec 80 DDB.So far I have not claimed any tax benefit for this.I am currently inder treatmrnt in a Govt hospital and get the medicines issued through CGHS.However, I have been undergoing lot of other expenses related to the disease and it’s treatment.My querry is whether I can claim thx benefit under this section. I can get a certificate from a practising private neurologist whom I have been regularly consulting for past several years.It would also be possible to get a certificate from the Govt Hospital where I am under treatment at present.

  12. Smita Venkat says:

    I am suffering from kidney failure & am on dialysis.Its impossible to cover expensive treatments like dialysis in just 40,000 annually even in a reasonably-priced private hospital..As far as some govt hospitals and charity trusts are concerned there is no quality dialysis there,though they charge less,but in the long run the patient pays a huge price by contracting HCV,HIV etc & such other dreadful diseases.Hence people rush to pvt hospitals where quality dialysis is assured and small things are taken care of.But these pvt hospitals charge a lot.There was also a talk of waiving import duty on dialysis equipment(dialyser and tubing)in Maharashtra’s Budget this year.Have they been waived yet? Even taxes on EPO(haemoglobin inducing inj) injections should be waived as one injection costs 2k-3k and a patient requires EPO inj at least once a week.Basically living a healthy and quality life while on dialysis is very expensive in India, as I have unfortunately realised.Especially when there is no medical insurance to back up..Unless and until the Govt decides to do something about it people like me and many others will continue to suffer and die a very painful death.

  13. AJAY says:

    Is there Private name hospital such as action balaji certificate will work or only government certificate required.

    In Delhi there is less number of nephologist in govt. hospital. & AIIMS also refused referred to safdarjung

  14. Veronica says:

    Can you please clarify whether rheumatic arthritis is covered under 80 DDB or not? My mother is suffering from severe condition of it.

    Thanks

  15. SPK says:

    Dear Sir,

    My 1 year old son was diagnosed with “Congenital Adrenal Hyperplasia – salt loosing type” when he was one month old. There on he is surviving on life saving drugs.

    can you please clarify, if the expenses towards treatment for my son be exempted under section 80/ any other relevant section. If yes, what are the documents needs to be submitted to avail the exemption.

  16. Arun says:

    Well I am an assessee suffering from critical illness and have been availing this deduction since 2008.
    if I am not wrong the deduction amount was raised from 30000 to Rs40000/- in 2011.
    Well we are now in 2015 and the same minister who had decontrolled the prices of the 348odd crucial drugs last year should have been first thought of comparing the price increase then and now and its impact on the poor patients?
    How can a patient on dialysis/or even have undergone organ transplantation continue to to manage on for a mere Rs40000/-. Incurable decease these are a patient have to be continuously on medication( highly expensive) for rest of his life.
    If he thought that certificate by concerned specialist from Pvt Hospitals rather than only from Govt Hospital is an indirect admission that Govt hospitals are less equipped to deal with such cases and here also I like to request the Minister to first to look in to the Cost side of treating these deceases in a Hitech/multi- speciality hospital

    Dear minister you are free to bring all the reforms in the manner you like but you should also be mindful of the genuine demands of these less fortunate people like me who even cant get the Critical insurance cover as symptoms are detected at a very early stage before the patient cud realize and would invariably do not pass the medical test meant for such cover.

    With no 80D and low 80DDB, you are still asking people like me to pay tax even if the salary meant a mere Rs4.80 Lac?

    Hope you will revisit this Section(80DDB) again and would raise the amount of deduction to a realistic amount as Rs40k is dearly inadequate.

    Arun

  17. Pankaj Kundu, Advocate says:

    A good thinking of finance minister

  18. S K Tiwari says:

    Dear Sir
    Can you please clarify whether rheumatic arthritis is covered under 80 DDB or not?

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