44. A government employee draws Rs.20,000/- p.m., receives HRA of Rs.24,000/- And he resides in his own house. He paid total house loan principal of Rs.15.0004- and interest Rs.60,0001- P.F. 10,000/-, LIC 5000/-, Tuition fee 30,000/- He has undergone treatment for renal failure in a private hospital where he was treated by a general physician. He claimed deduction u/s 80 DDB. You as an assessing officer calculate his taxable income. The assessee version is only a transfer of stock to its depot. Give your opinion with reason?

1. Facts of the Case

The assessee is a government employee with the following income and expenses:

• Salary: ₹20,000 per month = ₹2,40,000 annually
• HRA Received: ₹24,000 per annum
• Accommodation: Resides in own house (not rented)
• Home Loan Repayment:
  • Principal: ₹15,000
  • Interest: ₹60,000
• Other Deductions:
  • Provident Fund (PF): ₹10,000
  • LIC Premium: ₹5,000
  • Tuition Fees: ₹30,000
• Medical Treatment: Underwent treatment for renal failure by a general physician in a private hospital
• Claim: Deduction under Section 80DDB for medical expenses.

2. Issues in the Case [Questions]

1. What is the net taxable income after all permissible deductions under the Income Tax Act?
2. Can the assessee claim HRA exemption when living in his own house?
3. Is the treatment for renal failure by a general physician in a private hospital eligible for deduction under Section 80DDB?
4. Are all the claimed deductions valid under Section 80C, Section 24(b), and Section 80DDB?

3. Legal Principles Covered

A. HRA Exemption – Section 10(13A) & Rule 2A

• HRA exemption is not available if the employee is not paying rent.
• Since the assessee resides in his own house, the entire HRA (₹24,000) is fully taxable.

B. Deduction under Section 80C

Maximum deduction allowed: ₹1,50,000. Eligible deductions include:

• PF: ₹10,000
• LIC Premium: ₹5,000
• Tuition Fees: ₹30,000
• Principal repayment of home loan: ₹15,000
  Total 80C deduction = ₹60,000

C. Deduction under Section 24(b) – Interest on Housing Loan

• Interest on self-occupied property is allowed up to ₹2,00,000
• Claimed interest: ₹60,000
  Allowed: ₹60,000

D. Deduction under Section 80DDB – Medical Treatment

• Section 80DDB allows deduction for treatment of specified diseases, including chronic renal failure, if prescribed by a specialist (e.g., nephrologist).
• However, the assessee was treated by a general physician in a private hospital.
• Therefore, the claim fails due to lack of certification by a specialist as required under Rule 11DD.
  Deduction under Section 80DDB: Not Allowed

4. Possible Judgement

Tax Computation:

Particulars	Amount (₹)
Gross Salary (₹20,000 × 12)	2,40,000
HRA (Fully Taxable)	24,000
Gross Total Income	2,64,000
Less: Deduction under Section 24(b) (Interest on Housing Loan)	(60,000)
Less: Deduction under Section 80C (PF + LIC + Tuition + Principal)	(60,000)
Less: Deduction under Section 80DDB	Nil
Net Taxable Income	1,44,000