Section 80DD of Income Tax Act, 1961 provides tax deductions to individuals and Hindu Undivided Families (HUFs) with disabled dependants. It aims to lessen the expenses incurred on the treatment, training and rehabilitation of the disabled dependant.
Read along to learn the eligibility criteria, limits of deductions, and necessary documentation required if you want to avail this benefit.
What is Section 80DD of the Income Tax Act?
Section 80DD allows a deduction to individuals or HUFs caring for a disabled dependant. Unlike Section 80U, which relates to a disabled taxpayer, Section 80DD benefits the caregivers by spending money to support the disabled dependant.
List of disabilities included under the Section 80DD
The disabilities included are:
- Blindness
- Low vision
- Hearing impairment
- Leprosy-cured individuals
- Locomotor disability
- Mental retardation
- Mental illness
- Autism
- Cerebral palsy
- Multiple disabilities
Conditions to avail of section 80DD deduction
The 80DD deduction can be claimed under certain conditions:
- The disabled dependant must be a spouse, child, parent or sibling of the taxpayer.
- The dependant must have at least 40% disability, certified by a recognised medical authority.
- The taxpayer must have incurred 80DD medical treatment expenses or expenses on training and rehabilitation.
Who can claim a deduction under section 80DD?
The 80DD deduction amount can be claimed by:
- Resident individuals who financially support a disabled dependant.
- Hindu Undivided Families (HUFs) where the dependant is a family member.
Note: Non-resident Indians (NRIs) are not eligible to claim this deduction.
Maximum amount of deduction under Section 80DD
The deduction under Section 80DD is fixed and not dependant on actual expenses incurred. The deductions are:
- Rs 75,000 per year for dependants with 40% to 79% disability.
- Rs 1.25 lakh a year for dependants with 80% or more disability (severe disability).
Benefits of claiming 80DD
Some of the benefits for claiming deductions under 80DD of Income Tax Act are:
- It encourages families to take care of their disabled dependants by offering tax relief.
- It is available irrespective of actual medical expenses incurred.
Documents required for claiming tax deduction under Section 80DD
The following documents are required to claim this benefit:
- Disability certificate issued by a recognised medical authority.
- Form 10-IA, if the dependant has a severe disability (80% or more).
- Self-declaration stating that the taxpayer has incurred expenses for the disabled dependant’s treatment and maintenance.
- Medical treatment receipts (not mandatory but recommended for records).
How do you claim deduction under Section 80DD?
The process involves the following steps:
- Obtain a valid disability certificate from a prescribed medical authority.
- Fill out Form 10-IA (if claiming a deduction for severe disability).
- Declare the deduction under the “Deductions” section while filing an Income Tax Return (ITR).
- Keep supporting documents ready for verification by tax authorities if required.
Who is responsible for issuing the medical certificate for a dependant with a disability?
The disability certificate must be issued by:
- A neurologist with an MD in Neurology (for neurological disabilities).
- A civil surgeon or chief medical officer (CMO) of a government hospital.
- Any designated medical authority notified by the government.
What does “dependants” & “disability” mean under Section 80DD?
- Dependants: For Section 80DD, dependants include spouse, children, parents, and siblings who rely financially on the taxpayer.
- Disability: As per the law, a person with at least 40% disability (as certified by a recognised medical authority) is considered disabled.
You can claim 80DD medical treatment insurance of handicapped dependant if the individual meets the above-mentioned criteria.
FAQs
- Can the same person claim both Section 80DD and Section 80U?
No, one can never claim Section 80DD and Section 80U together.
- Is there any restriction on age in claiming for deduction under Section 80DD?
The 80DD tax benefit has no age limit.
Conclusion
Section 80DD, apart from offering a fixed tax relief to individuals and Hindu Undivided Families (HUFs) who have a disabled dependant, also helps reduce premiums of specific health insurance policy and critical illness insurance policy concerning such treatments. Section 80DD for senior citizens provides similar benefits. Taxpayers should check the eligibility criteria, prepare the required documents, and adhere to the procedures for filing income tax returns to avail of this benefit.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It is not intended as a substitute for professional advice, diagnosis, or treatment. Please consult your general physician or another certified medical professional for any questions regarding a medical condition. Relying on any information provided in this blog is solely at your own risk, and ICICI Lombard is not responsible for any effects or consequences resulting from the use of the information shared.