A Detailed Guide covering Deductions Under Section 80DD

Section 80DD is a great tax benefit instrument for Indian resident taxpayers who are managing the expenses of their disabled dependent. This tax benefit also ensures that disabled people find the right treatment and can lead a dignified life with care and support from family.

What is Section 80DD?

A resident individual or HUF (Hindu Undivided Family) can claim a deduction in taxes under Section 80DD of Income Tax Act, 1961, on medical treatment and expense on support and maintenance of a wholly dependent individual who is differently-abled or with disability.

Premium payments towards insurance plans that are specifically designed for the disabled dependent also qualify for deductions under Section 80DD.

Conditions to avail deductions under Section 80DD

The following criteria have to be met to qualify for Section 80DD deductions:

  • Deduction under Section 80DD applies to the disabled or differently-abled dependent and not for self.
  • If the disabled or differently-abled dependent has already claimed for deduction in taxes under Section 80U for self, then the taxpayer doesn’t qualify for tax deduction under Section 80DD.
  • Family members who can qualify as a dependent of the individual taxpayer include spouse, parents, children, sisters and brothers. In HUF, any member of the HUF qualifies as a dependent.
  • The deductions include expenses incurred by the taxpayer towards medical treatment, nursing, training and rehabilitation of the disabled or differently-abled dependent, or the sum paid towards the premium of the insurance policy from LIC or another registered insurer, designed specifically for the disabled or differently-abled dependent.
  • The disability in the dependent should be 40% or more to qualify for deductions under Section 80DD of Income Tax Act, 1961.
  • The disability should be as defined under Section 2(i) of Persons of Disabilities Act, 1995.

Eligibility for deduction under Section 80DD

  • The individual or HUF should be a resident of India to claim deduction under Section 80DD.
  • Non-resident individuals (NRI) do not qualify for tax deductions under Section 80DD.

Disabilities included under Section 80DD

  • Disability as defined under Section 2(i) of Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995
  • Disability as defined under Section 2(a)(c)(h) of National Trust for the Welfare of Person with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 are included under Section 80DD of the Income Tax Act. They are as follows:
    • Blindness
    • Low vision
    • Severe or cognitive mental disabilities
    • Hearing impairment
    • Leprosy cured
    • Locomotor disability
    • Cerebral palsy
    • Autism
    • Mental illness
    • Multiple disabilities

The disability in the person should be 40% or more to qualify under Section 80DD. Disability of 80% or more is defined as a severe disability.

Definition of the disabled dependent as per Section 80DD

The disabled person has to meet the following conditions, to be termed as a disabled dependent as per Section 80DD, which would allow their caretaker to avail tax benefits:

  • The self, or, spouse, parents, children, sisters and brothers of the taxpayer are considered as a disabled dependent.
  • In HUF, any member of the HUF can be considered as disabled dependent.
  • The disabled dependent should be mostly or wholly dependent on the taxpayer for medical expenses, support and maintenance.
  • The disabled dependent must not claim deductions for self under Section 80U of the Income Tax Act.

Who provides medical certificate certifying the disability

As per the 80DD income tax laws, a medical certificate from the following authorities qualifies for deduction claims under Section 80DD:

  • Chief Medical Officer or a Civil Surgeon of a government hospital
  • The neurologist with Doctor of Medicine (MD) degree in Neurology or Pediatric Neurologist with Doctor of Medicine (MD) degree in Neurology for children

Tax deduction under Section 80DD

The amount that can be claimed for tax deduction under Section 80DD depends on the severeness of the disability in the dependent. The tax deduction amount that can be claimed for deductions from the Financial Year 2015-16 onwards is as follows:

  • Dependent with 40% disability or more: If a differently-abled dependent has a disability of 40% or more on any one of the included disabilities, then the taxpayer, who is part of the family of the disabled dependent and pays for their medical expenses, support and maintenance of the disabled dependent, can claim a tax benefit of up to ₹75,000 in a financial year.
  • Dependent with 80% disability or more: If a differently-abled dependent has a severe disability, i.e. the disability is 80% or more, then the taxpayer, who is part of the family of the disabled dependent and pays for their medical expenses, support and maintenance of the disabled dependent, can claim a tax benefit of up to ₹1,25,000 in a financial year.

Note: Before the financial year 2015-16, the tax deduction limit for 40% disability was ₹50,000, and for 80% disability, it was ₹1,00,000.

Required documents to claim tax deduction under Section 80DD

The taxpayer has to submit the list of documents as mentioned below to claim deductions under Section 80DD of Income Tax Act, 1961:

  • Medical certificate: The taxpayer has to furnish a copy of the medical certificate issued by the competent authority, as mentioned in 80DD, authenticating the nature and the intensity of the disability in the dependent.
  • Form 10-IA: The taxpayer has to furnish Form 10-IA if the disabled dependent suffers from multiple disabilities, cerebral palsy or autism.
  • Self-declaration certificate: The taxpayer has to furnish the self-declaration certificate, specifying the incurred expenses on medical treatment, nursing training and rehabilitation of the disabled dependent.
  • Receipts of paid insurance premiums: The self-declaration form acts as a valid document to claim most of the expenses. Thus, the taxpayer doesn’t need to furnish actual receipts to claim deductions on expenses. But if the taxpayer wants to claim deductions on insurance premium payments towards the insurance policy taken specifically for the disabled dependent, then they need to furnish the actual payment receipts at the time of applying for tax benefits under Section 80DD.


Frequently Asked Questions

  • Who is eligible to claim deductions under Section 80Dd of the Income Tax Act, 1961?

Individuals and HUF who also are Indian residents, and pay for the medical expenses of their disabled family member, can claim deductions under Section 80DDof the Income Tax Act.

Non-resident Indians are not eligible to claim deductions under Section 80DD.

  • Who can be considered as a disabled dependent of the taxpayer to become eligible for 80DD deductions?

For individuals, a disabled dependent can be their spouse, parents, dependent children and brothers or sisters to become eligible for tax deductions. For HUF, any disabled member of the family would make them eligible for tax deductions.

  • What kind of expenses qualify for deductions under Section 80DD?

Expenses incurred by the taxpayer towards the medical treatment, nursing, training and rehabilitation of the disabled dependent, qualify for deductions under Section 80DD. Plus, the premium paid by the taxpayer towards the insurance policy designed specifically for the disabled dependent is covered under Section 80DD.

  • Can the disabled dependent claim tax deduction on their medical expenses?

Yes, the disabled dependent can claim tax benefit on their medical expenses as per Section 80U of the Income Tax Act. 

  • If the disabled dependent has claimed for tax deductions, can the taxpayer who has paid off the expense also claim for tax deductions?

No, if the disabled dependent has already claimed for tax deductions under Section 80U, then the taxpayer cannot claim tax benefits under Section 80DD.

Section 80DD is a great tax benefit instrument for Indian resident taxpayers who are managing the expenses of their disabled dependent. This tax benefit also ensures that disabled people find the right treatment and can lead a dignified life with care and support from family.

1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Subin
Subin

One of the prime contributors for this blog. I have 5 years of experience in SEO, Digital Marketing, Content Marketing, and have knowledge in topics like Tax, HR, Recruitment & Staffing. A free-spirit with a passion for travelling & music.

Post a Comment

Your email address will not be published. Required fields are marked *

Related Posts

All About Professional Tax payments

All About Professional Tax payments

Subin Sep 16, 2020 8:32 AM

What is Professional Tax? Professional Tax is a direct tax which is levied monthly by…

A Detailed Guide to Calculate HRA (with examples)

A Detailed Guide to Calculate HRA (with examples)

Shalini L Sep 11, 2020 5:52 PM

HRA or House Rent Allowance is a part of the remuneration package of salaried employees….

Income Tax Login And Registration Guide

Income Tax Login And Registration Guide

Shalini L Sep 10, 2020 11:09 AM

If you have been a tax-paying salaried person in India, then you will know that…

E-filing Income Tax in India

E-filing Income Tax in India

Subin Sep 08, 2020 8:46 AM

Many have heard of the terms — income tax e-filing and income tax returns, but…

Forms 15G and 15H to save TDS on Interest Income

Forms 15G and 15H to save TDS on Interest Income

Subin Sep 08, 2020 1:38 AM

Have you kept deposits in your nearest bank? And are you gaining interest out of…

Subscribe For Newsletter

Subscribe to get the latest news and happenings around recruitment space