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!

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.

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. 

[Source]

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%). 

• 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. 

[Source]

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.

[Source]

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.  

[Source]

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

[Source]

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). 

[Source]

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.