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Time to Revisit Section  80DDB of Income Tax Act – Need to increase limit of expenditure  incurred on treatment of all Diseases

The Finance Minister would present Budget 2022 in next 20 days. It is opportune time to highlight that the very purpose of Section 80 DDB of the Income Tax Act has been defeated and the desired benefits have not been received by the assessees. Firstly the monetary limit of Rs. 40000/- for an individual and Rs. 1,00,000/- for a senior citizen is too meagre. Secondly, the limitation of allowance only on particular/specified diseases is unjustified, discriminatory and unjustified in the present scenario.

Section 80DDB of the Income Tax Act provides a deduction for the expenditure actually incurred on the treatment of specified diseases for self, spouse, children, parents and siblings. It is relevant that exemptions u/s 80DD and 80DDB can be claimed together subject to fulfillment of other conditions. The comprehensive list of specified diseases is covered by Rule 11DD of the Income Tax which reads as under:

Section 80DDB- Time to increase limit of expenditure incurred on treatment

“Specified diseases and ailments for the purpose of deduction under section 80DDB.

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.”

It is pertinent that India is a Welfare State. The assessees after paying loads of Income Tax are not entitled for any free medical assistance or free medical insurance by the Government. The Government in order to mitigate their agony and expenditure introduced Section 80 DDB of the Income Tax by allowing limited deduction of such expenses. But, looking to the medical bills in private hospitals, this amount is negligible. The Bills for surgeries and prolonged hospitalization costs couple of Lakhs and the exemption looks insignificant & nugatory. The Honourable FM should understand this situation and mandate the entire medical expenditure as allowable deduction u/s 80DDB of the Income Tax Act.

The other amendment that is required is the restrictions imposed on the eligible diseases. Every disease in present times is deadly. Heart attacks, Engioplasty, Covid -19, Diabetes, Hypertension, Depression, joint replacement are expensive and sometimes fatal. How can patients suffering from these diseases be excluded from the list contained in Rule 11DD. In fact the discrimination is violative of Article 14 of the Constitution.

It is imperative that the FM makes suitable amendments in the ensuing Budget and widen the scope of Section 80 DDB of the Income Tax Act.

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April 2024