Section 80DD

Being an Indian resident, you can claim tax deduction under Section 80DD of the Income Tax Act, 1961. It is basically when any of your dependent is taking a medical treatment. For claiming the same, at the time of filing ITR return, you are required to submit medical certificates as mentioned under provision.

Section 80DD offer relief to lower and middle stratus of Indian Society. Offer tax benefits on the medical expenses incurred on the dependent family member.

The eligibility to claim deduction under Section 80DD :

  • Any individual or a part of Hindu Undivided Family, who is a resident of India.
  • This deduction is not available to non-resident Indian (NRI), since a lot of countries such as Canada, largely help their residents when it comes to medical treatment.

The documents required to claim deduction under Section 80DD :

  • Medical Certificate:
    • To claim tax deduction, taxpayer need to provide medical certificate to authenticate the disability of the dependent.
  • Self-declaration Certificate:
    • It is must to have document to claim tax deduction under Section 80DD. It is a proof of expenses incurred by the taxpayer on the medical treatment of disabled dependent.
  • Form10-IA:
    • It is submitted by the taxpayer if the dependent member suffering from multiple disabilities, autism, or cerebral palsy
  • Insurance premium receipt:
    • Any claim that is made against the disabled dependent, then, actual receipt must be submitted.

Expenses deduction under Income Tax Calculation :

  • Any expenses incurred for medical treatment includes training, nursing and rehabilitation of dependent.
  • The amount paid towards Life Insurance Corporation (LIC), Unit Trust of India or any of the other insurers for the sole purpose of buying specified schemes or insurance policies to help in the maintenance of a dependent with disabilities.

Who are disabled dependent?

  • Individual, daughter, spouse, parents, your brother or sister i.e. any siblings can be considered as your disabled dependent.
  • All these are wholly dependent on the taxed for their support as well as maintenance.

Different types of disabilities covered under Section 80DD :

  • Cognitive or severe mental disabilities
  • Cerebral palsy
  • Or Multiple disabilities
  • Locomotor disability
  • Blindness
  • Mental illness
  • Low vision
  • Leprosy-cured
  • Hearing impairment
  • Autism

Important facts to keep in mind for claiming tax deduction :

  • Medical certificate is mandatory as it certifies the disability of dependent and the person they are dependent on. It needs to be renewed periodically.
  • Claim only in that case if individual suffering from cerebral palsy or any multiple disabilities. Must submit duly filled form number 10-IA to be filled and submitted for them.
  • There are also 2 formats other than the one mentioned earlier, for an individual who is suffering from any sort of severe mental illnesses and the rest of the disabilities.
  • Individuals required to submit self-declaration, signed and certifying the expenses incurred pertaining to the medical treatment which includes nursing, rehabilitation as well as training of the disabled dependent.

Who is authorize to provide medical certificate?

  • A neurologist with a Doctor of Medicine (MD) degree in Neurology
  • APaediatric Neurologist with a similar degree for children.
  • A Civil Surgeon or a Chief Medical Officer (CMO) of any government hospital.

Tax Deduction Criteria under Section 80DD :

  • The Income Tax Deduction allowed under Section 80DD for disabled dependent at max is Rs 75,000.
  • The Income Tax Deduction allowed for severely disabled dependent is Rs 125,000.
  • Deduction is not dependent on the amount of expenses incurred regardless the real expenses disabled dependent relative is lesser than amount mentioned above, the tax assessed will be eligible for the full deduction.

Conditions for Tax Deduction under 80DD :

  • People need to submit a hard copy of the medical certificate stating disability as issued by the central or state government medical board to make the deduction claim.
  • One needs to be sure that the insurance plan must be in tax assessor’s name. It should be life insurance policy. No claim is allowed in health insurance policy.
  • It could also pay annuity or simple lump sum amount as death benefit for the disabled dependent in the case of your untimely death.
  • In case the disabled dependent dies earlier than the taxed, the policy amount is returned to him or her and hence would be treated as income and hence taxed for income.

Frequently Asked Questions

  • Who all are eligible for claiming tax deductions under Section 80DD of the Income Tax Act?
    Any individual or a Hindu Undivided family being an Indian Resident can claim for tax deductions under Section 80DD of the Income Tax Act.
  • What all are the expenses one can claim under Section 80DD of the Income Tax Act?
    Expenses incurred on rehabilitation, training or nursing, medical treatment of a disabled dependent can be claimed as deductions under Section 80DD of the Income Tax Act. Even expenses incurred on premium payments on certain insurance policies are also part of it.
  • Can NRIs claim tax deduction under Section 80DD?
    No, Non-Resident Individuals (NRIs) cannot claim tax deduction under Section 80DD. Under this section of Income Tax Act, 1961, one resident Indian and Hindu Undivided Family (HUFs) can claim tax deduction.