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 dependant-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.

Difference Between Section 80U and Section 80DD

An individual who is certified as a person with a disability can claim tax benefits under Section 80U of the IT Act. Individuals can claim tax deduction under Section 80DD for bearing the expenses of the medical treatment of a disabled dependant. Whereas, under Section 80U, an individual certified as a person with a disability can himself claim the deduction.

It is important to understand that deduction under Section 80DD is not allowed if the dependant relative claims a deduction under Section 80U for himself.

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

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