Tax Deductions for Disabled Persons under Section 80DD of Income Tax Act

There are certain sections of the Income Tax Act, 1961, which allows deductions from total gross income before the imposition of tax. Deductions are available given the expenses used to cover medical treatment of a differently-abled person. One such section is 80DD of the Income Tax Act. Want to know more about it? Read along!

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What Is Section 80DD?

Section 80DD of the Income Tax Act, 1961 focuses on the deduction for the medical expenditure of a dependent with disabilities or a differently-abled person. This section also includes premium payment towards an insurance plan bought for a differently-abled person.

Who Is Eligible to Claim Deduction Under Section 80DD?

Following is a list of individuals or groups eligible for claiming tax deduction under Section 80DD -

A resident of India who manages medical expenses of differently-abled dependents.
Any Hindu Undivided Family (HUF) that manages medical expenses, training or rehabilitation expenses of differently-abled dependents.

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What Deductions Are Available Under Section 80DD?

Deductions available under Section 80DD depend on the nature of the disability. These include,

Tax deduction of up to ₹75,000 is available for a dependent individual with a disability (more than 40% but less than 80%).

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Tax deduction of up to ₹1,25,000 is available for a dependent Individual with severe disability (80% or more). It is the maximum 80DD limit that one can claim.

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These deductions are applicable on the following expenses:

Expenditure covering medical treatment such as nursing, rehabilitation of the differently-abled dependent individual
Amount paid towards Life Insurance Corporation Ltd or any other insurance company for purchasing specific insurance policies or schemes to take care of differently-abled dependents.

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Who Qualifies as Disabled Dependent to Claim Deductions Under Section 80DD?

The definition of disability is stated in clause (i) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995. It includes individuals with autism, cerebral palsy and multiple disabilities (certified by an authorised medical authority) who are considered disabled persons. However, they must have a disability of at least 40% to claim a tax deduction.

On the other hand, dependent (under Section 80DD) refers to spouse, children, parents, siblings, members of HUF.

Together, disabled dependents refer to any individual (spouse, children, parents, siblings, member of HUF) who has 40% of disability (certified by an official medical authority).

Note: Deduction under Section 80DD of the Income Tax Act is available for disabled dependents of the taxpayer and not the taxpayer himself.

As the definition of disability is apparent to individuals, lets’ learn different natures of disability that fall under Section 80DD. Under this section, the following kinds of disability and severe disability are considered under Section 80DD of the Income Tax Act.

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Blindness
Hearing impairment
Autism
Mental retardation
Locomotor disability
Low vision
Mental illness
Cerebral palsy
Leprosy-cured

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How to Claim Deductions Under Section 80DD?

Individuals willing to claim Section 80DD deduction must submit a medical certificate (issued by an official medical authority) at the time of claiming a tax deduction. Further, they have to provide Form 10-1A, ITR papers, self-declaration and other essential documents.

Wondering where one can get a Medical Certificate for the Disabled Dependant?

Individuals can avail Medical Certificate for the Disabled Dependant from the following persons -

A Chief Medical Officer (CMO) or Civil Surgeon of a government hospital.
A neurologist having a Doctor of Medicine (MD) degree in Neurology.
Paediatric Neurologist, holding an equivalent degree of Neurologist IN MD (if it is a child).

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The above-mentioned piece gives a comprehensive idea of deductions under Section 80DD. Read these details and apply for tax deductions under this section. Remember, deduction under 80U applies to individuals with a disability; on the other hand, 80DD applies to taxpayers who take charge of the maintenance of a disabled dependent. Therefore, individuals cannot claim for tax deduction under both these sections simultaneously.

FAQs About Section 80DD of Income Tax Act

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Can Non-Residential Indians claim for tax deductions under Section 80DD?

No, Non-Residential Indians cannot claim for tax deductions under Section 80DD.

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Does the amount of deduction depend on medical expenses or the age of a dependent differently-abled person?

No, the amount of deduction depends on medical expenses or severity of the disability of the differently-abled person. [Source]

Can deductions be claimed for differently abled dependants under 80DD?

Yes, deductions can be claimed for differently-abled dependents under Section 80DD. For an individual taxpayer, dependents include the spouse, children, parents, and siblings. In the case of a Hindu Undivided Family (HUF), it refers to any member of the HUF. The maximum deduction allowed is the actual medical expenses incurred or ₹40,000, whichever is lower. You can use an income tax calculator to include these deductions and calculate your total tax liability.

Tax Deductions for Disabled Persons under Section 80DD of Income Tax Act

What Is Section 80DD?

Who Is Eligible to Claim Deduction Under Section 80DD?

What Deductions Are Available Under Section 80DD?

Who Qualifies as Disabled Dependent to Claim Deductions Under Section 80DD?

How to Claim Deductions Under Section 80DD?

FAQs About Section 80DD of Income Tax Act

Can Non-Residential Indians claim for tax deductions under Section 80DD?

Does the amount of deduction depend on medical expenses or the age of a dependent differently-abled person?

Can deductions be claimed for differently abled dependants under 80DD?

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