The Deduction to Families of Disabled Persons is considered under Section 80DD. These deductions can be claimed by the families of disabled dependents but not to the dependents themselves. Here the disabled person has to note one point that if he has claimed the deduction under Section 80U, then he cannot claim the same deduction under Section 80DD, means the amount can be claimed only once. This Deduction under Sec 80DD can be claimed by an Individual as well as by the HUF’s who are taking care of the disabled dependent. The insurance premium will also cover as a deduction to specific insurers for the purpose of maintenance of a disabled dependent.
Section 80DD: Deduction on Medical Treatment for Disability, Handicapped
These are the following provisions given below under Section 80DD which is applicable from the assessment year 2004 to 2005:
What are the Conditions to be satisfied?
These are the following conditions that are to be satisfied:
- The taxpayer must be a resident of India. Resident means he may be an ordinarily resident or not ordinarily resident of India.
- The taxpayer must be an individual resident means he may be an Indian citizen or foreign citizen or an HUF.
- The taxpayer has opted for any or both of the following options:
- Option1: The taxpayer has incurred expenditure for the medical treatment. The treatment includes nursing, training and rehabilitation of a person with a disability.
- Option2: The taxpayer has paid or deposited under any scheme framed in this behalf by the Life Insurance Corporation or any other insurer or the administrator or specified company and approved by the Board in this behalf for maintenance of dependent.
- For the above purpose a “Dependent” means a person with disability is a person who satisfies the following points:
- In case of the individual, the “Dependent” means the Parents, Spouse, Children, Brothers, and Sisters of the Individual or any of them.
- In case of the Hindu Undivided Family, the “Dependent” means a member of a Hindu Undivided Family.
- If the disable dependent means such person who is wholly or mainly dependent upon such individual or Hindu Undivided Family for support and maintenance.
- The person cannot claim any deduction under Section 80U while computing his Total Income for the Assessment Year (AY) relating to the previous year.
- Disability Dependent shall have the meaning which is assigned and explained in section 29(i) of the Persons with Disability. It also explains about all the rights and equal opportunities under Protection of Rights and Full Participation Act, 1995.
- A person with Disability means a person having any disability states above or not less than 40%.
- The Option 2 in the above scheme provides the payment of an annuity or a lump sum amount for the benefit of dependent being a person with a disability in the event of the death of the individual or the member of the Hindu Undivided Family in whose name subscription to the Scheme has been made.
- Under Option 1 the assessee nominates either the dependent being a person with a disability or any other person or a trust to receive the payment on his behalf for the benefit of such dependent.
- For claiming the deduction, the taxpayer shall have to furnish a copy of the certificate issued by the medical authority along with the return of income. Where the condition of disability requires reassessment, a fresh certificate from the medical authority shall have to be obtained after the expiry of the period mentioned on the original certificate in order to continue to claim the deduction.
What is the Amount of Deduction under Section 80DD?
If the above conditions are satisfied then the Deduction can be claimed by the taxpayer. The Deduction limits for the disabled dependents that is for those who are having 40-80% disability has been increased for the Assessment Year 2016-2017 that is Rs. 75,000/- per annum. Before increasing the amount of Deduction is Rs. 50,000/- per annum for the Assessment Year 2015-2016. The Deduction for disability dependents that is for those who are having 80% or more disability the amount is Rs. 1, 25,000/- per annum for the Assessment Year 2016-2017. Before increasing the limit is Rs. 1,00,000/- for the Assessment Year 2015-2016 and it Rs. 75,000/- for the Assessment Year 2009-2010.
Faq’s Related to Section 80DD
What are the necessary forms to be filled for claiming 80DD Deductions?
The required documents are that the taxpayer must have to produce a Certificate of Disability from the hospital in which he was taking the treatment for claiming the deduction. The disability dependents have to submit Form 10IA in the case of multiple disabilities, cerebral palsy or autism. The Form 10IA is to be duly signed by the paediatric neurologist for children, neurologist, civil surgeon or by a chief medical officer.
What are the Disabilities mentioned under Sec 80DD?
These are the few approved disabilities deducted under Sec 80DD of Income Tax Act, 1961:
- Low Vision.
- Mental illness.
- Loco Motor Disability.
- Leprosy cured.
- Cerebral palsy.
- Mental Retardation.
- Multiple disabilities.
- Hearing Impairment.
Who is Eligible to Claim the Deduction?
Any Individual or an HUF (Hindu Undivided family) who is a resident in India. The Deduction under section 80DD is not available to NRI (non-resident Indian).
What the type of expenses that are covered?
Those expenses which are related to nursing, training, medical treatment, and rehabilitation of the dependent. The premiums paid on specified insurance plans that benefit disabled persons are also covered.
Which Expenses are eligible for Deduction on Medical Treatment?
These are specified expenses that are eligible for Deduction under Sec 80DD:
- The amount paid to Unit Trust of India, LIC (Life Insurance Corporation) or to any of the other insurers for the purpose of buying specified insurance or scheme for the purpose of maintenance of such dependant.
- The Expenditure for the training, medical treatment, rehabilitation and including nursing of the disability dependent.
Q: Mr.Ramesh is a resident individual. He deposits annually a sum of Rs. 15,000/- with Life Insurance Corporation for the maintenance of his handicapped grandmother who is wholly dependent upon him. Can he claim deduction under Sec 80DD?
A: The disability is one which is specified in Rule 11A. It also comes under Section 2(i) of the persons with disabilities. A copy of the certificate from medical authority is submitted. As in the definition of “Dependent” under 80DD grandmother is not mentioned. So nothing shall be deducted under this Section.