7 things to know when an individual assesses or HUF uses deductions Section 80DD

  1. This deduction refers to the expenditure incurred on medical treatment (including nursing), training and rehabilitation of a handicapped dependent relative (self, spouse, children, parents, siblings or members of HUF). The ‘dependent’ must be solely reliant on the assessee for support and maintenance.
  2. This deduction also includes payment or deposit to specified scheme for maintenance of dependent handicapped relative, such as payment towards insurance schemes that aid in the maintenance of the disabled dependent.
  3. When the disability is between 40% and 80% there is a fixed deduction of Rs.75,000. The disability is defined under Section 56(4) of the Persons with Disabilities (Equal Opportunities Protection of Rights and Full Participation) Act.
  4. A person with severe disability is defined as having a disability of 80% or more as per Section 56(4) of Persons with Disabilities (Equal Opportunities Protection of Rights and Full Participation) Act. Expenditure on account of such person is deductible upto a limit of Rs. 125,000.
  5.  A person taking deductions under Section 80 U cannot also take deductions under Section 80 DD.
  6. It is not important to maintain receipts of the actual expenses incurred for the disabled dependent (except insurance premium receipts). Therefore, the deduction is not based on the actual expenses encountered for the disabled dependent and as such deductions can be taken in full. However, individuals have to submit a self declaration certifying the expenses made towards nursing, rehabilitation or medical treatment towards disabled dependent.
  7. However, certifications are required  -
  8. a. From a specified specialist. As specified in the Income Tax Act –

       i. A Neurologist with a Doctor of Medicine (MD) Degree in Neurology or a Paediatric Neurologist with a similar degree for children

      ii. Civil Surgeon or Chief Medical Officer of any Government hospital.

b. Certificate will need to be renewed from time to time

c. Patients getting treated in a private hospital don’t need to get the certification from a Govt. hospital.

d. In the case of dependent suffering from Autism, cerebral palsy or multiple disabilities a Form 10-IA is to be filled up and submitted. 

 

Disability is defined as –

  • Blindness
  • Low Vision
  • Leprosy – Cured
  • Hearing Impairment
  • Loco Motor Disability
  • Mental Retardation
  • Mental Illness
  • Autism
  • Cerebral Palsy
  • Multiple Illnesses