Sec 80 dd

This query is : Resolved

Amol (Querist)
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08 August 2011 This query is submitted for expert consideration because non of the students could give convincing answer in that forum.I request an expert to give his opinion only if he is very sure & presents a systematic & convincing reasoning. Thanks.

" Irrespective of expenditure" words used by T.N. Manoharan & Singhania in their books are of no relevance.(& so all above opinions) What matters before ITO is the Bare Act which clearly uses the words "incurred". Sec 80 DD deduction is not an allowance but it is a kind of reimbursement. There is difference between 80 DD & 80 U apart from the eligible claimant. If you incurred expenditure of Rs. 40,000/- How can you claim deduction of Rs. 1 lakh ? specially when you don't have any bills? ITO will disallow Rs. 60,000/- in scrutiny assessment.These words "irrespective of actual expenditure" are created by private authors , they are not from Bare Act.

Is there any Case Law for Sec 80 DD ?

Interpretations such as ," if 'this' is not given , that means it must be 'that' ", are very vague & not convincing. The word "incurred" in bare Act cannot be rebutted.

Sec 80 DD has some practical difficulties. Take a case where an old dependant has severe 100% disability. Say blindness. Now here further medical treatment is not possible. Nursing/Training is also not needed. He has learnt to manage his own daily chores without anybodys help.Maintenance exp are only basic needs of food ,clothing & shelter which his son provides . Now specific bills related to dependant cannot be produced because exp are met from general household exp. But Rs. 1 lakh deduction cannot be claimed because Bare Act uses the words "incurred" which is not possible to prove in absence of specific bills. Thus, the irony is that for severe 100% disability, there is no scope of incurring any medical exp & maint. exp cannot be proved & hence Rs. 1 lakh deduction is disallowed !

One of our clients, representing above case , my Boss didn't agree to the argument of '" irrespective of expenditure", & even after possessing certificate from medical officer, couldn't claim deduction & had to pay Rs. 10,000/- tax on Rs. 1 lakh disallowed.

So do you mean that Rs. 1Lakh deduction can be claimed for severe disability even if no expenditure is actually incurred at all OR just to satisfy requirement of exp. incurred even if only Re.1 exp is incurred supported by bill of Re.1?

CMA Ashutosh Kumar Gupta

CMA Ashutosh Kumar Gupta (Expert)
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10 August 2011 Please refer to the Circular No.775, dated 26-3-1999 and accordingly the relevant position is as under as regards the query cited here:
It has come to the notice of the Board that some of the DDOs are asking the employees to submit medical vouchers/bills in connection with the expenses incurred on the medical treatment of their handicapped dependant apart from a certificate from the Government hospital regarding the permanent physical disability or mental retardation of the handicapped dependant.

It is clarified that it would be sufficient if the employee furnishes a medical certificate from a Government hospital and a declaration in writing duly signed by the claimant certifying the actual amount of expenditure on account of medical treatment (including nursing) training and rehabilitation of the handi¬capped dependant and receipt/acknowledgement for the amount paid or deposited in the specified schemes of LIC or UTI. Therefore, DDOs may not insist upon production of vouchers/bills by the employees for having incurred expenditure on medical treatment of their handicapped dependants for allowing the deduction under section 80DD for the purpose of computing tax deductible at source.