Tax Matters

Tax relief for patients with chronic renal failure

Question: My mother was hospitalised in July this year and she was diagnosed as a Chronic Renal Failure (both kidneys are destroyed). She is put on for dialysis twice a weak and this is supposed to be a life long treatment for her. My questions are

  1. She was covered under company’s group mediclaim policy but the claim was rejected by the Insurance company. Do I am eligible for any deduction under Indian Income Tax Act for the hospitalisation expenses?
  2. Apart from that, can i claim for deduction under sec 80DD or 80U of Income Tax act.

Answer: Section 80DDB of the I T Act is for relief to people like you.In my view , you can get the deduction of Rs 40,000 (Rs 60,000 in case your mother is 65 years or more) u/s 80DDB of the I T Act because renal failure is one of the eligible disease u/s 80DDB.

The list of diseases eligible for deduction u/s 80DDB is prescribed in Rule 11DD of I T Rule, which is given as under:

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

  1. Neurological Diseases where the disability level has been certified to be of 40% and above: Dementia; Dystonia Musculorum Deformans; Motor Neuron Disease; Ataxia; Chorea; Hemiballismus; Aphasia; Parkinson’s Disease;
  2. Malignant Cancers
  3. Full Blown Acquired Immuno–Deficiency Syndrome (AIDS);
  4. Chronic Renal failure
  5. Hematological disorders: Hemophilia; Thalassaemia.

Rule 11 D specifies that you have to get a certificate in Form 10–1 from – 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. So, you get a certificate from such doctor.

The section prescribes that it should be enclosed iwth the return, but now from Asst Yr 2007–08 ,no documents are required to be attached with the return. Therefore, you get the certificate from doctor and keep the proof of expenditure on your mother. You are advised to keep the letter of rejection of claim of insurance. The reason is that the the dedcution is allowable as under:

  1. Expense minus Insurance claim received minus reimbursement by employer to the maximum extent of Rs 40,000 (Rs 60,000 in case of Sr. Citizen)

Can You claim deduction u/s 80DD or 80 U ?
I think you will not get any of them – 80DD or 80U for the simple reason that section 80DD provides relief for expense on Disable person . The renal failure , in my view is not listed within the meaning of disability . Read this answer to know the list of disease defines under the definition of disability for the purpose of section 80DD. Section 80U is also for persons having prescribed disability .Section 80 U gives relief to patient i.e for the assessee himself/herself and not to persons who are spending but not having the disability.

Source: FAQ on Indian Income Tax laws: taxworry.com. Is There Any Tax Relief for Expense on Renal Failure Patient? 1 October 2007.
http://www.taxworry.com/2007/09/is-there-any-tax-relief-for-expense-on.html