Who can claim a deduction under section 80DD?

Deduction under Section 80DD of the income tax act is allowed to Resident Individuals or HUFs for a dependent-who is differently-abled and is wholly dependent on the individual (or HUF) for support & maintenance.

Conditions to avail of Section 80DD deduction

Below are the conditions you must meet to avail this deduction –

• Deduction is allowed for a dependant of the taxpayer and not the taxpayer himself.
• The deduction can only be claimed by resident individuals of India.
• The taxpayer is not allowed this deduction if the dependant has claimed a deduction under section 80U for himself/herself.
• Dependant in case of an individual taxpayer means spouse, children, parents, brothers & sisters of the taxpayer. In case of a HUF means a member of the HUF.
• The taxpayer has incurred expenses for medical treatment (including nursing), training & rehabilitation of the differently-abled dependant or the taxpayer may have deposited in a scheme of LIC or another insurer for maintenance of the dependant.
• Disability of the dependant is not less than 40%.
• Disability is defined under section 2(i) of the Persons of Disabilities Act, 1995.

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What is the maximum amount of deduction allowed under Section 80DD?

Fixed amount of deductions are allowed under Section 80DD, irrespective of the actual expenditure. However, the amount of deduction depends on the severity of the disability.

• Where the disability is more than 40% and less than 80%: Rs 75,000.
• Where the disability is more than 80%: Rs 1,25,000.

Note: Before the Financial Year (FY) 2015-16 (FY 2014-15 & earlier years) – The deduction limit was Rs 50,000 where disability was at least 40% and Rs 1,00,000 where there was more than 80% disability.

Necessary Documents to Claim Tax Deduction Under Section 80DD

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

• Medical Certificate: In order to avail of tax deduction under Section 80DD, the taxpayer is required to provide a copy of the medical certificate as evidence of the dependent's disability.
• Form 10-IA: If the dependent with a disability is affected by autism, cerebral palsy, or multiple disabilities, it is necessary to submit Form No. 10-IA.
• Self-Declaration Certificate: Taxpayers must provide a self-declaration certificate stating the expenses incurred on the medical treatment, which includes nursing, rehabilitation, and training, of the disabled dependent.
• Receipts of Insurance Premium Paid: While a self-declaration certificate is generally sufficient for claiming most expenses, it is not necessary to keep the actual receipts. However, if the individual claims expenses for insurance policies taken for the disabled dependent, it is important to maintain the actual receipts as proof of the expenses.

Difference Between Section 80U and Section 80DD

Section 80U permits an individual certified as a person with a disability to claim the deduction for themselves. Whereas Section 80DD allows for tax deductions if you incur medical expenses for a disabled dependent.

It is important to understand that deduction under Section 80DD cannot be claimed if the dependent has already claimed a deduction under Section 80U for themselves 

Disabilities covered under Section 80DD

The following disabilities are covered u/s 80DD of the IT Act, 1961:

• Mental illness
• Hearing impairment
• Mental retardation
• Cerebral palsy
• Leprosy-cured
• Autism
• Loco motor disability
• Blindness
• Low vision

Who is responsible for issuing the medical certificate for a dependent with a disability? 

Below mentioned medical authorities can certify a person as disabled:

• A government hospital’s Civil Surgeon or Chief Medical Officer (CMO).
• A Neurologist with a Doctor of Medicine (MD) degree in Neurology. In case of a child, a Paediatric Neurologist holding an equivalent degree.

Things to Remember :

If a dependent passes away and you receive any funds from an insurance policy, those proceeds are subject to income tax deduction based on the relevant tax brackets.

The deduction provided under Section 80DD is applicable in addition to any other tax deductions claimed under different sections of the Act.

The current deductible income limit of Rs. 75,000 was approved starting from the accounting year 2015-2016, whereas it was previously Rs. 50,000. Additionally, the limit for severely-disabled individuals has been increased from Rs. 1,00,000 to Rs. 1.25 Lakhs.

Frequently Asked Questions (FAQs)

How much deduction can I claim if I have done expenditure of INR 15,000?

You can claim full deduction of Rs 75,000 or 1,25,000 irrespective of the actual expenditure.

What type of expenses are covered under Section 80DD?

You can claim expenses done for treatment, nursing, training, rehabilitation of the dependent along with insurance premium paid on plans specified for the dependent.

What documents are required to claim deduction under section 80DD?

To claim deduction under Section 80DD, you will need to submit a certificate in Form 10IA attested by medical authority. This certificate is for certifying the ‘person with disability’, ‘severe disability’, ‘cerebral palsy’, ‘autism’,  and ‘multiple disability’ for purposes of section 80DD.

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