Do you know taking care of the Disabled Dependents will help you get more and more relief under Section 80DD Of Income Tax Act?
Section 80DD of the Income Tax Act relieves the caretaker of the disabled dependents.
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Section 80DD – Deduction for Expenses on Disabled Dependent
Section 80DD offers a flat tax deduction, irrespective of the amount of expenditure to the caretaker of a disabled dependent. This is considered with the large expenditure on medical treatments, which often becomes a troublesome affair for the majority of Indian families.
Dependents Under Section 80DD
The term “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 80-U in computing his total income for the assessment year relating to the previous year
Who Can Avail Deduction Benefit?
The Deduction under Section 80DD of the income tax act is allowed to the following:
- Resident Individuals including parents, a spouse, siblings, or children; or
- HUFs
For a dependent-who is differently-abled and is wholly dependent on the individual (or HUF) for support and maintenance.
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 dependant, 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
Maximum Amount of Deduction
The Fixed amounts of deductions is 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 80% or more: Rs 1,25,000.
It is noteworthy that 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.
Requisite Documents For Claiming Section 80DD Benefit
Majorly, 4 documents are required to be submitted to claim tax benefits under Section 80DD of the Income Tax Act, 1961:
Firstly, the Medical Certificate. The taxpayer is required to provide a copy of the medical certificate as evidence of the dependent’s disability in order to avail of tax deduction under Section 80DD.
Secondly, if the dependent with a disability is affected by autism, cerebral palsy, or multiple disabilities, the taxpayer must necessarily submit Form No. 10-IA. Form No. 10-IA is a certificate of the medical authority for certifying ‘person with disability’, ‘severe disability’, ‘autism’, ‘cerebral palsy’ and ‘multiple disability’ for purposes of section 80DD and section 80U.
Thirdly, the 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.
Lastly, the taxpayer is required to submit 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.
What are the Disabilities Under Section 80DD?
The disabilities that are covered under Section 80DD are as follows:
- Locomotor disabilities
- Hearing disability
- Mental disability
- Mental retardation
- Cerebral Palsy
- Blindness and impaired vision
- Leprosy-cured
Constitution & Section 80DD Deduction
Article 21 of the constitution relates to the “Protection of Life and Personal Liberty. It states that no person shall be deprived of his life or personal liberty except according to procedure established by law.
Every person including the disabled has his life and liberty guaranteed under Article 21 of the Constitution.
The objective of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 is to ensure that all persons with disabilities can lead their lives with dignity, without discrimination and with equal opportunities.
