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Section 80DD Deduction

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.

Deduction Eligible 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.

Individual with Disabled Dependant
In case of individual taxpayer, the deduction under Section 80DD can be claimed for expenses relating to a disabled dependent who can be spouse, son, daughter, parents, brother or sister.
HUF with Disabled Dependant
If the taxpayer is a HUF, then the deduction can be claimed for supporting a disabled dependent who is a member of the HUF.
Deduction for Persons with Disability

Definition of Disability under Section 80DD

"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".

Definition of Disability under Section 80DD
Blindness
"Blindness" refers to a condition where a person suffers from any of the following conditions, namely:- (i) Total absence of sight or (ii) Visual acuity not exceeding 6160 or 201200 (snellen) in the better eye with correcting lenses or (iii) Limitation of the field of vision subtending an angle of 20 degree or worse.
Cerebral Palsy
"Cerebral palsy" means a group of non-progressive conditions of a person characterized by abnormal motor control posture resulting from brain insult or injuries occurring in the pre-natal, perinatal or infant period of development.
Leprosy Cured Person
"Leprosy cured person" means any person who has been cured of leprosy but is suffering from (i) Loss of sensation in hands or feet as well as loss of sensation and paresis in the eye and eye-lid but with no manifest deformity; (ii) Manifest deformity and paresis; but having sufficient mobility in their hands and feet to enable them to engage in normal economic activity; (iii) Extreme physical deformity as well as advanced age which prevents him from undertaking any gainful occupation, and the expression "leprosy cured" shall be construed accordingly.
Hearing Impairment
"Hearing impairment" means loss of sixty decibels or more in the better year in the conversational range of' frequencies.
Loco Motor Disability
"Loco motor disability" means disability of the bones, joints muscles leading to substantial restriction of the movement of the limbs or any form of cerebral palsy.
Mental Illness
"Mental illness" means any mental disorder other than mental retardation.
Mental Retardation
"Mental retardation" means a condition of arrested or incomplete development of mind of a person which is specially characterized by sub normality of intelligence.
Low Vision
"Person with low vision" means a person with impairment of visual functioning even after treatment or standard refractive correction but who uses or is potentially capable of using vision for the planning or execution of a task with appropriate assistive device.

Medical Certificate for Claiming Section 80DD Deduction

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.

Insurance or Deposit for Maintaining Disabled Dependant

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.

Disabled Dependant must Be Nominated
The assessee nominates either the dependant, being a person with disability, or any other person or a trust to receive the payment on his behalf, for the benefit of the dependant, being a person with disability.

If the dependant, being a person with disability, predeceases the individual, an amount equal to the amount paid or deposited shall be deemed to be the income of the assessee of the previous year in which such amount is received by the assessee and shall accordingly be chargeable to tax as the income of that previous year.
Payment of Annuity or Lump Sum amount
The scheme provides for payment of annuity or lump sum amount for the benefit of a dependant, being a person with disability, in the event of the death of the assessee in whose name subscription to the scheme has been made.
Insurance or Deposit for Maintaining Disabled Dependant

Section 80DD - Income Tax - Bare Act

For section 80DD of the Income-tax Act, the following section shall be substituted with effect from the 1st day of April, 2004, namely:-

  • 80DD. Deduction in respect of maintenance including medical treatment of a dependant who is a person with disability.—(1) Where an assessee, being an individual or a Hindu undivided fami­ly, who is a resident in India, has, during the previous year,
    • incurred any expenditure for the medical treatment (including nursing), training and rehabilitation of a dependent, being a person with disability; or
    • paid or deposited any amount under a scheme framed in this behalf by the Life Insurance Corporation or any other insur­er or the Administrator or the specified company subject to the conditions specified in sub-section (2) and approved by the Board in this behalf for the maintenance of a dependant, being a person with disability, the assessee shall, in accordance with and subject to the provi­sions of this section, be allowed a deduction of a sum of fifty thousand rupees from his gross total income in respect of the previous year:
  • The deduction under clause (b) of sub-section (1) shall be allowed only if the following conditions are fulfilled, namely:
    • the scheme referred to in clause (b) of sub-section (1) provides for payment of annuity or lump sum amount for the bene­fit of a dependant, being a person with disability, in the event of the death of the individual or the member of the Hindu undi­vided family in whose name subscription to the scheme has been made;
    • the assessee nominates either the dependant, being a person with disability, or any other person or a trust to receive the payment on his behalf, for the benefit of the dependant, being a person with disability.
  • If the dependant, being a person with disability, predeceases the individual or the member of the Hindu undivided family re­ferred to in sub-section (2), an amount equal to the amount paid or deposited under clause (b) of sub-section (1) shall be deemed to be the income of the assessee of the previous year in which such amount is received by the assessee and shall accordingly be chargeable to tax as the income of that previous year.
  • The assessee, claiming a deduction under this section, shall furnish a copy of the certificate issued by the medical authority in the prescribed form and manner, along with the return of income undersection 139, in respect of the assessment year for which the deduction is claimed:

    Provided that where the condition of disability requires reassessment of its extent after a period stipulated in the aforesaid certificate, no deduction under this section shall be allowed for any assessment year relating to any previous year beginning after the expiry of the previous year during which the aforesaid certificate of disability had expired, unless a new certificate is obtained from the medical authority in the form and manner, as may be prescribed, and a copy thereof is furnished along with the return of income.

    Explanation:- For the purposes of this section,
    • "Administrator" means the Administrator as referred to in clause (a) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002);
    • "dependant" means
      • in the case of an individual, the spouse, children, parents, brothers and sisters of the individual or any of them;
      • in the case of a Hindu undivided family, a member of the Hindu undivided family, dependant wholly or mainly on such individual or Hindu undivided family for his support and maintenance, and who has not claimed any deduction under section 80U in computing his total income for the assessment year relating to the previous year;
    • "disability" shall have the meaning assigned to it in clause (i) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996);
    • "Life Insurance Corporation" shall have the same mean­ing as in clause (iii) of sub-section (8) of section 88;
    • "medical authority" means the medical authority as referred to in clause (p) of section 2 of the Persons with Disa­bilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996);
    • "person with disability" means a person as referred to in clause (t) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participa­tion) Act, 1995 (1 of 1996);
    • "person with severe disability" means a person with eighty per cent or more of one or more disabilities, as referred to in sub-section (4) of section 56 of the Persons with Disabili­ties (Equal Opportunities, Protection of Rights and Full Partici­pation) Act, 1995 (1 of 1996); (h) "specified company" means a company as referred to in clause (h) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002).
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