Section 80DD - Deduction for Expenses on Disabled Dependent

Section 80DD Deduction of the income tax 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.

Section 80DD of the Income Tax Act greatly relieves people with disabled dependents.

What is Section 80DD Medical Expenditure?

An assessee or the taxpayer could claim the tax deduction during a financial year against:

  • Any amount paid for medical treatment, training, and rehabilitation of a dependent of the person that is suffering from a disability.
  • Any amount that is paid or deposited any amount under a scheme. Such schemes are framed on this behalf by LIC or any other insurer or administrator. Moreover, the scheme needs to be approved by the board on this behalf for the maintenance of a dependent, a person with a disability.

Who is Eligible for Section 80DD Deductions?

A person may claim deductions under Section 80DD if they have a disability dependent, such as parents, a spouse, siblings, or children, or if they are a HUF with a disabled family member.

However, non-resident Indians are not permitted to claim deductions (NRI).

What are the Disabilities Under Section 80DD?

Mentioned here are the disabilities that are covered under Section 80DD. According to these, the taxpayers could claim deductions for their differently abled dependents:

  • Locomotor disabilities
  • Hearing disability
  • Mental disability
  • Mental retardation
  • Cerebral Palsy
  • Blindness and impaired vision
  • Leprosy-cured

Difference Between Section 80DD and Section 80U

Under Section 80U of the IT Act, a person who has been certified as having a disability may be eligible for tax advantages. Section 80DD of the tax code allows for tax deductions for anyone who pays for a disabled dependent's medical care. 

While under Section 80U, a person who has been certified as having a disability can independently claim the deduction.

It's crucial to know that if the dependent relative also claims a deduction for himself under Section 80U, the deduction under Section 80DD is not permitted.

Benefits of Section 80DD Claim

Individuals and HUFs may claim all deductions allowed by this Section, regardless of the cost of providing care for the dependent or the cost of insurance premiums. 

No expense-related paperwork is needed, but you will need to provide a medical certificate from a licensed physician attesting to your dependent's handicap in accordance with government guidelines.

Limitations of Section 80DD

The list of income tax deductions and their maximum amounts under Section 80DD is as follows:

  • To qualify for tax deductions, the dependent's condition must be at least 40% severe.
  • The taxpayer may deduct expenses related to the dependent's medical care, education, and rehabilitation, as well as insurance premiums paid for insurance plans created especially for dependents with disabilities.
  • According to Section 2(i) of the Persons with Disabilities Act, 1995, a person must be considered disabled.
  • If the dependent has already claimed a tax deduction for themselves under Section 80U, the deduction will not be permitted.
  • Dependent with a disability: A dependent person with a disability is someone who, according to a medical expert, has at least a 40% disability. The person or HUF who looks after the dependent with a disability may deduct up to ₹75,000 in taxes.
  • A person who is dependent and has a severe disability is one who, according to a medical expert's certification, exhibits at least 80% of any disability. The person or HUF who looks after the dependent with a disability may deduct up to 1,25,000 from their taxes.
  • The taxpayer's spouse, children, parents, or siblings are all considered to be dependents under Section 80DD. A member of a HUF who is dependent and has a disability is taken into account in the context of Section 80DD.
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