All Indian residents are eligible to say tax deductions under Section 80DD of the tax Act, 1961. In order to say the deduction a personal must have to submit medical certificates, medicine bills, and such other supportive documents.
Medical treatment, in the past few years has been on the rise, which has made medical treatment a difficult service to avail for the lower and middle startas of the Indian society. The Indian Government with the intention to permit some kind of relief to those groups of individuals especially people dependent with disability or on severe disability may now be provided some help through the tax under Section 80DD of the tax Act, 1961. Before one goes into further details, it’s important to know that the tax has changes in rates and minor amendments but the legal or relief aspect had to be based on the the 1961, as of now.
In Union Budget 2018, there have no changes made in Section 80DD.
Eligibility of Claim Deduction under Section 80DD:
He/She is suitable for the claim deduction under the section 80DD, one must:
- Be a private or be a piece of a Hindu undivided family, who may be a resident in India.
- This deduction is not available to non-resident Indian (NRI), since a lot of countries such as Canada, largely help their residents when it comes to medical treatment.
Expenses that are Deducted for Income Tax Calculation:
The following are the expenses that are exempted for tax under section 80DD:
- Any expenses incurred for medical treatment which incorporates nursing, training also as rehabilitation of dependent that’s disabled.
- The amount paid towards Life Insurance Corporation (LIC), Unit Trust of India or any of the other insurers for the sole purpose of buying specified schemes or insurance policies to help within the maintenance of a dependant with disabilities.
Who is Defined as Disabled Dependant Consistent With Tax laws?
If an individual , falls under the subsequent circumstances, he or she is eligible to be called a disabled dependent under section 80DD and hence the person’s caretaker can avail the income deductions:
- Individuals, or a spouse, son or daughter (or any child), parents also as brother or sister i.e. any siblings are often considered as your disabled dependant.
- This is applicable for any hindu undivided Family which suggests that any member of the HUF are often a disabled dependant.
- It is essential that the disabled individual be wholly or mostly depending on the taxed for his or her support also as maintenance.
- He/she should not claim the deduction under section 80U.
What Quite Disability or Severe Disability is taken into account under the Section 80DD?
Disability for Section DD is defined under article (i) of section 2 by the “Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995” also as disabilities includes in clauses (a), (c) and (h) of section 2 of National Trust for welfare of Person with Autism, spastic paralysis , retardation and Multiple Disabilities Act, 1999.
Hence this includes the following disabilities:
- Cognitive or severe mental disabilities
- Low vision
- Hearing impairment
- Locomotor disability
- Mental illness
- Cerebral palsy
- Or Multiple disabilities
It is essential to notice that person must not suffer but 40% of any of the above disabilities. When it involves sever disability 80% or above of 1 or more of the mentioned illnesses or disabilities is taken into account .
Other Things To Note For Claim Deduction:
- A medical certificate is mandatory when one wishes to say that the deduction with reference to the mentioned disabilities from any Government Hospital. The document should certify the incapacity of the dependant and therefore the person they’re contingent . The certificate needs to be renewed periodically.
- Individuals affected by Autism, spastic paralysis or any multiple disabilities, would require form number 10-IA to be filled and submitted for them.
- There are also 2 formats other than the one mentioned earlier, for an individual who is suffering from any sort of severe mental illnesses and the rest of the disabilities.
- Individuals even have to submit a self declaration, signed and certifying the expenses incurred concerning the medical treatment which includes nursing, rehabilitation also as training of the disabled dependant.
- It is not required to preserve the particular receipts for the disabled dependants expenses. But the particular receipts have to be submitted just in case the claim deduction with respect of payment made to any insurer like LIC, UTI and others for getting insurance plans or schemes for the upkeep of the disabled dependant.
Where are you able to avail a Medical Certificate for the Disabled Dependant?
According to the tax laws the subsequent people can assist you get a medical certificate to say ta deductions under section 80DD:
- A neurologist with a Doctor of Medicine (MD) degree in Neurology or a Pediatric Neurologist with a similar degree for children.
- A Civil Surgeon or a Chief medic (CMO) of any government hospital.
Tax Deduction Under Section 80DD For Disabled Dependants
Before going forward it’s essential to know that within the case that a disabled dependant dies before the taxed individual he or she is going to be taxed for the superior amount paid in that year, since this would be treated as the survivor’s income for that year and hence be completely taxable.
- The tax deduction which is allowed, under section 80DD is Rs. 50,000 for what’s defined earlier as disabled dependant (40% and over disability) This limit went upto Rs. 75,000 since 2016.
- The tax deduction which is allowed, under section 80DD is Rs. 50,000 for what’s defined earlier as severely disabled dependant (80% and over disability) This limit went upto Rs. 1,25,000 since 2016.
- Deduction isn’t depend upon the quantity of expenses incurred regardless the important expenses disabled dependent relative is lesser than amount mentioned above, the tax assessed are going to be eligible for the full deduction.
Conditions for Tax Deduction under 80DD:
- People have to produce a tough copy of the medical certificate stating disability as issued by the central or the state Govt medical board to form the deduction claim.
- The insurance plan should be in the tax assessor’s name and also must be a life insurance policy and not a health insurance policy. It could also pay annuity or simple payment amount as benefit for the disabled dependant within the case of your untimely death.
- Incase the disabled dependent dies before the taxed, the policy amount is returned to him or her and hence would be treated as income and hence taxed for income.
Deductions Under Section 80DD FAQs
- Who qualifies for deductions under Section 80DD of the Tax Act?
Individuals and Hindu Undivided Families who are Indian residents can claim deductions under Section 80DD of the tax Act. Please note that non-resident individuals aren’t eligible to say deductions under this section.
- Who is taken into account as a disabled dependent for tax purposes under Section 80DD of the tax Act?
So far as someone who concerned, their spouse, children, siblings and father, mother are considered as disabled dependents under Section 80DD of the tax Act. For Hindu Undivided Families any member of the Hindu Undivided Family are often a disabled dependent.
- What are the expenses which will be claimed as deductions under Section 80DD of the tax Act?
Expenses incurred on rehabilitation, medical treatment, training or nursing of a disabled dependent are often claimed as deductions under Section 80DD of the tax Act. Even expenses incurred on premium payments on certain insurance policies that are especially designed for such cases are often claimed as deductions as long as the policy satisfies the conditions prescribed in the law.
- What is the most deduction amount under Section 80DD of the tax Act?
The maximum deduction amount which will be claimed under Section 80DD of the tax Act will vary supported the incapacity of the dependent. For instance, a dependent who features a minimum of 40% of a particular disability is considered an individual with disability, and therefore the individual who incurs costs on medical expenses of such a dependent can claim a maximum deduction of Rs.75,000 under Section 80DD of the tax Act. Dependents who have a minimum of 80% of any injury or any disability are considered persons with severe disability, and therefore the individual who incurs costs on the medical expenses of such a dependent can claim a deduction up to Rs.1.25 lakh under Section 80DD of the tax Act.
- What are the disabilities that I can claim deductions under Section 80DD of the tax Act?
The disabilities which certify for tax benefits under Section 80DD of the tax Act include loco motor disability, blindness, low vision, mental disease , retardation , leprosy-cured, hearing disorder , cerebral palsy and autism.