Hi there, if you are one this page we could assume that you have gone through our last to article (if not please click). In our last two blog piece we had talked about Section 80C, 80CCD, 80CCD(1B); these sections were used to save up to Rs. 2 Lac (baring standard deduction). Now it’s the time to move forward.
You must be amazed to know that majority of common tax payers never think above 80C, 80CCD, 80CCD(1B), for them this is the last limit of (Rs. 2 Lac) their deduction story. But actually it’s not! There are many opportunity for investing & getting deduction over & above Rs. 2 Lac (i.e. 80C in general). Remember this sub section 80D has two more sister sections 80DD & 80DDB. So let’s start
Sub Section 80D
You all know that medical emergencies always take us by surprise & for these medical eventualities we usually buy a health insurance. The amount invested in health insurance can be claimed for deduction under section 80D, exemption amount under this section is divided into slabs we will see that in a while. This sub section 80D has one more aspect, which is deduction on amount spent in medical check up in a year & it’s highest limit is Rs. 5000 (for self n dependents). But cumulative deduction summing these two parts (Health Insurance + Check-up) has caveats let’s see them :
|Persons Covered||Health Insurance Exemption Limit||Medical Check-up Exemption Limit||Cumulative Exemption Limit|
|Self & Family||Rs. 25000||Rs. 5000||Rs. 25000|
|Self & Family + Parents||Rs. 25000 + Rs. 25000||Rs. 5000||Rs. 55000|
|Self & Family + Senior Citizen Parents||Rs. 25000 + Rs. 30000||Rs. 5000||Rs. 60000|
|Self (Senior Citizen) & Family + Senior Citizen Parents||Rs. 30000 + Rs. 30000||Rs. 5000||Rs. 65000|
Remember keeping receipt of insurance & as well as check-up in your records is essential.
Sub Section 80DDB
This section deals with deduction on medical expenditure (self or dependent) done on diseases specified under rule 11DD (mentioned below). Amount eligible for deduction depend upon age as follows:
|For less than 60 years old||Lower of Rs 40,000 or the amount actually paid|
|For more than 60 years old||Lower of Rs 1,00,000 or the amount actually paid|
Points to be remembered under current deduction:
- The certificate can be taken from a Specialist as per the table below.
- Patients getting treated in a private hospital are not required to take the certificate from a government hospital.
- Patients receiving treatment in a government hospital have to take the certificate from any specialist working full-time in that hospital. Such specialist must have a postgraduate degree in General Medicine or an equivalent degree, which is recognized by the Medical Council of India (MCI).
- Certificate in Form 10I is no longer required.
- The certificate must have
- name and age of the patient
- name of the disease or ailment
- name, address, registration number and the qualification of the specialist issuing the prescription
- If the patient is receiving the treatment in a Government hospital, it should also have name and address of the Government hospital.
List Of Diseases Under Rule 11DD
|Serial No||Disease||Certificate to be taken from|
|(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||Neurologist having a Doctorate of Medicine (D.M.) degree in Neurology or any equivalent degree, which is recognised by the Medical Council of India|
|(ii)||Malignant Cancers||Oncologist having a Doctorate of Medicine (D.M.) degree in Oncology or any equivalent degree which is recognised by the Medical Council of India|
|(iii)||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|
|(iv)||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 recognised by the Medical Council of India|
|(v)||Hematological disorders (i) Hemophilia (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|
Sub Section 80DD
This deduction is only allowed to resident individuals or HUFs whose dependent is/are differently-abled and wholly dependent on the individual (or HUF) for support & maintenance. As there are few terms & conditions which need to be meet for availing this deduction –
- Deduction is allowed for a dependent of the taxpayer and not the taxpayer himself.
- The taxpayer is not allowed this deduction if the dependent has claimed a deduction under section 80U for himself/herself.
- Dependent in case of an individual taxpayer means spouse, children, parents, brothers & sisters of the taxpayer. In case of a HUF means a member of the HUF.
- The taxpayer has incurred expenses for medical treatment (including nursing), training & rehabilitation of the differently-abled dependent or the taxpayer may have deposited in a scheme of LIC or another insurer for maintenance of the dependent.
Amount deductable depend upon dependent disability percentage:
|Disability is 40% or more but less than 80%||Up To Rs. 75000|
|Disability is 80% or more||Up To Rs. 125000|
The following disabilities are covered under section 80DD:
- Hearing impairment
- Mental retardation
- Mental illness
- Cerebral palsy
- Low vision
- Loco motor disability
The following documents will have to be submitted to claim tax benefits under Section 80DD of the:
- Medical Certificate: To claim tax deduction under Section 80DD, the taxpayer will have to submit a copy of the medical certificate, which authenticates the disability of the dependent.
- Form 10-IA: If the disabled dependent is suffering from autism, cerebral palsy or multiple disabilities, then Form No. 10-IA has to be submitted.
- Self-Declaration Certificate: Taxpayers have to produce a self-declaration certificate, mentioning the expenses incurred on the medical treatment (including nursing, rehabilitation and training) of the disabled dependent.
- Receipts of Insurance Premium Paid: Since the self-declaration certificate will suffice for claiming most expenses, the individual is not required to preserve the actual receipts. However, if a claim is being made for the payment made towards insurance policies taken for the disabled dependent, then the actual receipts of the expenses need to be maintained.
This ends this section of Basics of Income Tax. Just to recall in common circumstances Sub Section 80D is of common usage & person can save some decent amount over n above Rs. 2 Lac (80C in general). Ok see you in next segment.