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Deduction Under Section 80DD

Tax deduction under Section 80DD of the Income Tax Act can be claimed by individuals who are residents of India and HUFs for the medical treatment of a dependant with disability(ies) or differently abled. The deduction amount will also cover insurance premium paid towards specific insurance plans designed for a disabled dependant.

Eligibility Criteria for Deduction Under Section 80DD

  • Any individual or HUF (Hindu Undivided Family) who is a resident of India can claim this deduction.

  • Non-Resident Individuals (NRIs) cannot claim deduction under Section 80DD of the Income Tax Act, 1961.

Terms and Conditions Associated with Claiming Deduction Under Section 80DD

  • Dependant can be spouse, children, parents, brothers and sisters of the taxpayer.

  • The taxpayer has borne expenses for medical treatment and training & rehabilitation of the dependant with disability or the taxpayer has paid premium for a specific insurance policy designed for such cases.

  • The taxpayer cannot claim this deduction if the dependant has already claimed deduction under Section 80U for himself or herself.

  • The disabled individual is wholly or to a large extent dependant on the taxpayer for their support.

Disabilities Covered Under Section 80DD

The following disabilities are covered under section 80DD of the Income Tax Act, 1961:

  • Hearing impairment

  • Mental retardation

  • Mental illness

  • Autism

  • Cerebral palsy

  • Blindness

  • Low vision

  • Leprosy-cured

  • Loco motor disability

Who Produces Medical Certificate For The Disabled Dependant?

Below mentioned medical authorities can certify a person as disabled:

  • A Civil Surgeon or Chief Medical Officer (CMO) of a government hospital.

  • A Neurologist with a Doctor of Medicine (MD) degree in Neurology. If it's for a child, then a Paediatric Neurologist holding an equivalent degree.

Deduction Amount Under Section 80DD

The amount of deduction allowed under Section 80DD of the Income Tax Act, 1961, will come down to whether the dependant suffers from disability or severe disability.

  • Dependant person with disability – A dependant person with disability is one who has at least 40% of any of the specified disability. The family member who takes care of the medical charges of the dependant person with disability can claim tax deduction of up to Rs. 75,000.

  • Dependant person with severe disability – A dependant person with severe disability is one who has at least 80% of any disability. The family member handling the medical expenses of dependant person with severe disability can claim tax deduction of up to Rs. 1,25,000.

Documents Necessary to Claim Tax Deduction Under Section 80DD

The following documents will have to be submitted to claim tax benefits under Section 80DD of the Income Tax Act, 1961:

  • 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 dependant.

  • Form 10-IA: If the disabled dependant 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 dependant.

  • 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 dependant, then the actual receipts of the expenses need to be maintained.

FAQs

What is Section 80DD?

Section 80DD of the Income Tax Act, 1961, allows individuals to claim tax benefits for the expenses incurred on the medical treatment, training or rehabilitation of a disabled dependant. The dependant can be spouse, children, parents, brothers and sisters of the taxpayer. The tax deduction amount will also cover insurance premium paid to specific insurance plans designed for a disabled dependant.

What type of expenses can be claimed as deductions under Section 80DD of the Income Tax Act?

Expenses related to medical treatment, which includes nursing, training and rehabilitation of a disabled dependant, and the premiums paid on specific insurance plans for the disabled dependant are covered under Section 80DD of the Income Tax Act.

What is the maximum amount that can be claimed as deduction under Section 80DD?

The amount of deduction allowed will come down to whether the dependant suffers from disability or severe disability.

  • Dependant person with disability: A dependant person with disability is one who has at least 40% of any of the specified disability. The person who looks after the medical charges of the dependant person with disability can claim a maximum tax deduction of Rs. 75,000.

  • Dependant person with severe disability: A dependant person with severe disability is one who has at least 80% of any disability. The person handling the medical expenses of dependant person with severe disability can claim a maximum tax deduction of Rs. 1,25,000.

What is the difference between Sections 80U and 80DD?

An individual who has been certified as a person with disability can claim tax benefits under Section 80U of the Income Tax Act. Tax deduction under Section 80DD can be claimed by that family member who bears the expenses on the medical treatment of a disabled dependant.

What are the documents required for claiming 80DD deductions?

A taxpayer will have to be submit the following documents to claim tax benefits under Section 80DD of the Income Tax Act:

  • A copy of the medical certificate authenticating the disability of the dependant.

  • If the disabled dependant is suffering from autism, cerebral palsy or multiple disabilities, then Form No. 10-IA has to be submitted.

  • Taxpayers have to produce a self-declaration certificate, mentioning the expenses incurred on the medical treatment (including nursing, rehabilitation and training) of the disabled dependant.

  • If a claim is being made for the payment made towards insurance policies taken for the disabled dependant, then the actual receipts of the expenses need to be maintained.

What are the disabilities covered under Section 80DD?

The disabilities covered under section 80DD of the Income Tax Act, 1961, are:

  • Hearing impairment

  • Mental retardation

  • Mental illness

  • Autism

  • Cerebral palsy

  • Blindness

  • Low vision

  • Leprosy-cured

  • Loco motor disability

Can NRIs claim tax deduction under Section 80DD?

No, Non-Resident Individuals (NRIs) cannot claim deduction under Section 80DD of the Income Tax Act, 1961. Tax benefits under this Section can only be claimed by individuals who are residents of India and HUFs.

Who can issue medical certificate for the disabled dependant?

The below mentioned medical authorities can certify a person as disabled:

  • A Civil Surgeon or Chief Medical Officer (CMO) of a government hospital.

  • A Neurologist with a Doctor of Medicine (MD) degree in Neurology. If it is for a child, then a Paediatric Neurologist holding an equivalent degree.

How is Section 80DD different from Section 80D and Section 80DDB?

Tax deduction under Section 80DD of the Income Tax Act can be claimed by individuals who are residents of India and HUFs for the medical treatment of a dependant with disability(ies) or differently abled. The deduction amount will also cover insurance premium paid towards specific insurance plans designed for a disabled dependant.

Tax deduction under Section 80D of the Income Tax Act can be claimed for premiums paid toward a health insurance policy. The total deductions that can be claimed under Section 80D are as under:

Members InsuredTotal Deduction
Self and familyRs. 25,000
Self and family + ParentsRs. 50,000 (Rs. 25,000 + Rs. 25,000)
Self and family + Parents (senior citizens)Rs. 75,000 (Rs. 25,000 + Rs. 50,000)
Self (senior citizen) and family + Parents (senior citizens)Rs. 100,000 (Rs. 50,000 + Rs. 50,000)

An additional tax deduction of up to Rs. 5,000 can be claimed for expenses borne on medical check-ups or preventive health check-ups. Tax benefits under Section 80D can also be claimed for premiums paid toward health insurance riders and critical illness insurance policies. It must, however, be noted that premiums paid for personal accident policies or personal accident riders do not qualify for tax deduction under this section.

Tax deduction under Section 80DDB of the Income Tax Act can be claimed by taxpayers who have dependents suffering from specified diseases. The dependant can be spouse, children, siblings or parents. The tax deduction that can be claimed by individuals is Rs. 40,000 or the sum actually paid, whichever is lesser. If the individual is a senior citizen, the tax benefits that can be claimed is Rs. 1,00,000 or the sum actually paid, whichever is lesser.

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