Section 80DD Deduction on Disability

By | November 11, 2014
a. Any  expenditure on dependent  for Medical, Nursing & Rehabilitation incurred on dependent relative suffering from permanent physical Disability, Autism, Cerebral Palsy, Mental Retardation, and Multiple disabilities

b. Deposits under LIC, UTI’s Scheme & other IRDA approved Insurers for the benefit of hysically Handicapped dependent
Up to Rs.50,000    if  disability  is  over  40%  &   Rs.1,00,000 if disability is severe (i.e., 80% or more of one or more disabilities).
This income tax deduction under section 80DD is in relation to expense on medical treatment of dependent suffering from disability. This deduction is open to individuals suffering from some disease. There are some specifies section 80dd diseases. Section 80DD and section 80U are normally described together. Lets answer a few questions:

1. Who is eligible for Section 80DD Exemption
Deduction is available to an individual and Hindu undivided family (HUF), who is resident during the year.
It clearly evident that deduction not available other than individual and HUF and also to a non-resident.
2. Now question arise who is dependent?
For individual dependent means spouse, son or daughter and, brother or sister and parents of the assessee.
For HUF dependent means members of the Hindu undivided family.
3. How much expense is allowed for income tax benefit in the form of deduction?
Assessee may have done one or both the option to incurred expense on dependent. We can also written a guide on section 80d for tax benefits on health insurance premium paid
a)     He has incurred any expenditure on the treatment, training and rehabilitation of disable dependant; or
b)      He has paid or deposit sum under scheme framed life insurance company or by other insurer for the benefit of dependent. You can read our life insurance tax benefits
So far as concern amount of deduction, word is used any that means if you incurred a single amount of rupees then;
i. Amount of deduction is allowed rs.50, 000, if not suffering from severe disability.
ii.  Amount of deduction is allowed rs.1.00, 000 if suffering from severe disability (here severe disability means the person is handicapped more than 80%).
Note: – no amount of deduction is allowed if disability is 40% or less.
4. How to prove that your dependent is disabled more than 40% or more than 80%.
Disability of dependent can be proved on the basis of certificate issued by medical authority and your certificate is up to date for claiming deduction.
5. What are the severe disabilities
Disability can explained as per define by “person with disabilities (equal opportunities, protection of rights and full participation) act,1995”
It consist the followings:
Blindness
Low vision
Leprosy-cured
Hearing impairment
Locomotors disability
Mental retardation
 Mental illness
And others are,
 Autism,
Cerebral palsy etc.
If certificate issued by medical authority show that disability is more than 80% then it is severe disability otherwise not.
7. Is it necessary to attach certificate with return?
There is no need to attach certificate with return because as per rule -12 no document can be attach with return.
In simplified manner, now in modern era return is filled in electronic form so there is no need to attach document.
Note: – Document may be called up by department in case of scrutiny.
8. What will happen if dependent dies before the assessee on which he is dependent?
In this case it shall be deemed income of individual or HUF in the previous year in which it is received and shall be chargeable to tax accordingly for which he incurred or deposit in scheme earlier.
9. What will happen if assessee dies before the dependent?
 If assessee dies then there is no question regarding  benefit availability of  deduction 80dd;
While disable person can claim deduction under section-80u.
10. If assessee claiming deduction under section 80dd then can dependent claim deduction under section 80u.
If assesse claiming deduction under section 80dd for the dependent  than dependent shall not eligible for claiming deduction under 80u because similar benefit cannot be claimed two times.
Deduction under section 80DD FAQ
1)      If my grandfather is dependent on me and he is suffering from disability should I avail deduction?
The deduction benefit is available to individual and HUF only but condition is that they should be specified relative means spouse, son/daughter, brother/sister or parents.
Grandfather is not covered under relative
Benefit of deduction 80dd not available in respect of grandfather
2)     I am a salaried employee living Delhi/Mumbai etc. And I spent rs.5000 on medical treatment of my son/daughter/father/mother/sister/brother, is there deduction under section 80DD available
Firstly, he should be resident, which is apparent in this case;
Secondly, benefit of Rs.50,000  or Rs.1,00,000 is available irrespective of amount spent;
Third, if disability is more than 40% but up to 80% then Rs.50000 benefit available and in case more than 80% Rs.100000 benefit available.

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