Deduction u/s 80DD:- Medical Treatment of Disabled Person

In this article we discuss about the concept of deduction u/s 80DD of Income Tax Act, 1961. This deduction is available to Individual or HUF for the maintenance and medical treatment of a person with disability dependent.

Who is eligible to this deduction:-

• An individual or a HUF (Hindu Undivided Family), who is a resident of India, during the previous year, is eligible for deduction.
• Amount paid or deposited to LIC, UTI or any other insurer for the purpose of buying specified scheme or insurance for the maintenance of disabled dependent
• A Non-Resident Individual cannot claim deduction under section 80DD of Income Tax Act, 1961.

Amount paid or deposited for Insurance Scheme:

• Premium payment can be paid on annual basis or Lump sum basis.
• It should be for the benefit of dependent disabled person.
• The policy should be in the name of the Individual or HUF.
• Nomination of policy should be in the name of
• Disabled dependent or
• Any other person or trust that would receive the money for the benefit of your disabled dependent.
• If dependent disabled person predeceases the individual or a member of the HUF, then an amount equal to paid or deposited in insurance scheme shall be deemed to be the income of the taxpayer of the previous year in which such amount is received by the taxpayer and shall be chargeable to tax.

Term and condition for claim of deduction:-

• Taxpayer must be an Individual or HUF, who is resident in India.
• Taxpayer has incurred any expenditure for medical treatment including nursing, training and rehabilitation of a dependent of a person with disability.
• Taxpayer cannot claim deduction under this section if dependent has already claimed deduction u/s 80U of Income Tax Act, 1961.
• Taxpayer to claim this deduction shall require to furnish a copy of certificate issued by a medical authority in the prescribed form and manner, along with the return of income u/s 139, in respect of the assessment year for which the deduction is claimed.

Limit of Deduction Amount:-

• If taxpayer incurred expenses for a dependent person with disability (At least 40% of any of the specified disability) then maximum deduction can be claimed of Rs. 75,000.
• If taxpayer incurred expenses for a dependent person with serve disability (At least 80% of any of the specified disability) then maximum deduction can be claimed of Rs. 1,25,000.

Form No. 10IA:-

• Certificate of the medical authority for certifying ‘person with disability’, ‘severe disability’, ‘autism’, ‘cerebral palsy’ and ‘multiple disability’ for the purpose of section 80DD and section 80U.
• Certificate can be issued by any of the following:-

• • Neurologist having the degree of Doctor of Medicine (MD)
  • Pediatric Neurologist having the same equivalent degree
  • Civil Surgeon/ CMO (Chief Medical Officer) of government hospital.

Dependent disabled Person:-

• In case of Individual: Spouse, Child, Parents, Brothers, Sisters wholly or mainly dependent on such individual.
• In case of HUF: any member of HUF wholly or mainly dependent on such HUF.
• Taxpayer cannot claim deduction under this section if dependent has already claimed deduction u/s 80U of Income Tax Act, 1961.