Section 80DD deduction can be claimed by individuals who are resident in India and HUFs for maintenance and medical treatment of a disabled dependant. The maximum deduction under section 80DD is Rs.75,000 for disabled dependants. In case the disabled dependent is a person with severe disability, the maximum deduction allowed is Rs.1.25 lakhs. Deduction under Section 80DD is not dependant on the amount of expenses incurred. Hence, even if the actual expenses on above mentioned disabled dependent relative is less than amount mentioned, full deduction can be claimed under Section 80DD.
Disability means a person suffering from more than 40% disability, as certified by a medical practitioner. For maintaining a disabled dependant, a deduction of Rs.75,000 can be claimed as deduction. Severe disability means a person suffering from more than 80% disability. For maintaining a disabled dependant with severe disability, a deduction of Rs.1.25 lakhs can be availed.
Expenses incurred by the taxpayer to provide medical treatment for a disabled dependant like nursing, training and rehabilitation of a dependant is can be claimed as a deduction. Also, if the taxpayer made any payment or deposit under a scheme for maintenance of a disabled dependant operated by Life Insurance Corporation or any other insurance company or Unit Trust of India or Jeevan Aadhar Plan is admissible as deduction under section 80DD. However, if an assessee claims deduction under Section 80DD, the disabled dependant should not have claimed deduction under Section 80U.
"Person with disability" means a person suffering from not less than 40% of any disability mentioned here as certified by a medical authority. The definition for disability under Section 80DD is taken from the "Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995" and "National Trust for welfare of Person with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999".
Taxpayers claiming Section 80DD deduction should file a copy of the medical certificate issued by the medical authority. In case of person with disability or severe disability due to autism, cerebral palsy or multiple disability, certificate issued by the medical authority in Form No. 10 – IA should be submitted. The medical certificate for claiming deduction under Secton 80DD can be issued by a neurologist with a Doctor of Medicine (MD) degree in Neurology or a Pediatric Neurologist with a similar degree for children or a Civil Surgeon or a Chief Medical Officer (CMO) of any government hospital.
For temporary disability, the certificate will be valid for the period starting from the assessment year to the previous year during which the certificate was issued and ending with the assessment year relevant to the previous year during which the validity of the certificate expires.
Section 80DD deduction can be claimed for insurance or deposits made in specified scheme for maintenance of a disabled dependant. For an insurance or deposit to be eligible, the scheme must adhere to the following conditions.
For section 80DD of the Income-tax Act, the following section shall be substituted with effect from the 1st day of April, 2004, namely:-
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