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Understanding who can claim 80DD Deduction under the Income Tax Act

Updated: Dec 15, 2023


Understanding 80DD Deduction under the Income Tax Act: A Comprehensive Guide

The Income Tax Act of India provides various deductions and exemptions to taxpayers to encourage savings and support specific social causes. One such provision is Section 80DD, which deals with deductions related to expenses incurred on the medical treatment and rehabilitation of dependents with disabilities. This section aims to ease the financial burden on individuals taking care of their disabled family members. In this blog, we will delve into the details of the 80DD deduction, including its eligibility criteria, quantum of deduction, and documentation requirements.

 

Table of Content


 

What is a deduction under 80DD?

Section 80DD falls under Chapter VI-A of the Income Tax Act, which covers deductions available to individual taxpayers. This particular section is designed to offer relief to individuals who have dependents with a disability.


What is the Eligibility Criteria claim deduction under 80GG?

Dependant Eligibility: The crux of Section 80DD lies in its focus on the dependant, encompassing the spouse, children, parents, brothers, and sisters of the taxpayer (or members of a Hindu Undivided Family - HUF).


Taxpayer's Residential Status: Deductions under Section 80DD are exclusively available to resident individuals of India. Non-resident taxpayers are not eligible to claim these deductions.


Non-Double Deduction: An essential point to note is that a taxpayer cannot claim Section 80DD deductions if the dependant has already availed deductions under Section 80U for themselves.


Nature of Expenses: The taxpayer becomes eligible for deductions if they have incurred expenses for the medical treatment, including nursing, training, and rehabilitation, of the differently-abled dependant. Additionally, deposits made in schemes of LIC or other insurers for the maintenance of the dependant also qualify.


Disability Criteria: To qualify, the dependant's disability should not be less than 40%, as defined under Section 2(i) of the Persons with Disabilities Act, 1995.


What is the Deduction  Maximum amount available under section 80DD?


The deduction allowed under Section 80DD is a fixed amount, irrespective of the actual expenses incurred. As per the Income Tax Act, the maximum deduction allowed is:


-   Rs. 75,000:   If the disability is between 40% to 80%.

-   Rs. 1,25,000:   If the disability is 80% or more.


What are the documentation and certification requirements to claim a deduction?

To claim tax benefits under Section 80DD of the Income Tax Act, 1961, individuals need to furnish specific documents to substantiate their eligibility and the expenses incurred. Here is a breakdown of the requisite documents:


Medical Certificate:   To support the claim for tax deduction under Section 80DD, individuals must submit a copy of the medical certificate. This certificate serves as evidence of the disability that the dependent is experiencing.


Form 10-IA:   In cases where the dependent is affected by conditions such as autism, cerebral palsy, or multiple disabilities, it is mandatory to provide Form No. 10-IA as part of the documentation.


Self-Declaration Certificate:   Taxpayers are required to submit a self-declaration certificate detailing the expenses incurred on the medical treatment, including nursing, rehabilitation, and training, for the disabled dependent. This document serves as a crucial