Section 80DD of the Income Tax Act, 1961 has provisions for individuals who are residents of India and HUFs (Hindu Undivided Family) to claim tax deductions on the medical treatment and related expenses of a dependant (with disabilities) or a differently-abled person. The tax deductions under Section 80DD also cover any insurance premiums paid towards insurance plans specifically designed for differently-abled dependants.
A medical certificate for the differently-abled needs to be produced by a Civil Surgeon, CMO or a Neurologist with an MD from a government hospital. In the case of a child, the certificate must be produced by a Paediatric Neurologist holding an equivalent degree. The taxpayer will need to submit a copy of the certificate at the time of claiming tax deduction under Section 80DD. Given below are more details about Section 80DD deductions, and its eligibility criteria.
The following people/groups of people can claim deductions under Section 80DD of the Income Tax Act:
Any individual who is a resident of India can claim tax deduction under Section 80DD if they have medical or insurance expenses for differently-abled dependants.
Any HUF can claim tax deduction under Section 80DD if they have medical or insurance expenses for differently-abled dependants.
It should be noted that Non-Resident Indians (NRIs) cannot claim deductions under Section 80DD of the Income Tax Act.
Following are the disabilities that are covered under Section 80DD. Based on these, the taxpayers can claim deductions for their differently-abled dependants:
Blindness and impaired vision
The following is the list of income tax deductions and their limits under Section 80DD:
Dependant with a disability: A dependant person with a disability refers to an individual who has at least 40% of any disability as certified by a medical professional. The individual or HUF that takes care of the differently-abled dependant can claim tax deductions of up to ₹75,000.
Dependant with severe disability: A dependant person with a severe disability refers to an individual who has at least 80% of any disability as certified by a medical professional. The individual or HUF that takes care of the differently-abled dependant can claim tax deductions of up to ₹1,25,000.
The deduction will not be allowed if the dependant has claimed tax deduction under Section 80U for themselves.
A dependant in Section 80DD can be the spouse, children, parents, or siblings of the taxpayer. In the case of a HUF, a differently-abled dependant member of the HUF is considered under Section 80DD.
The disability of the dependant must be at least 40% and above to be eligible for tax deductions.
The tax deduction is expenses incurred by the taxpayer for the differently-abled dependant related to medical treatment, training and rehabilitation, and insurance premiums paid for insurance plans specifically designed for differently-abled dependants.
An individual must be defined as disabled under Section 2(i) of the Persons with Disabilities Act, 1995.
Section 80DD of the Income Tax Act, 1961 has provisions for resident Indian individuals and Hindu Undivided Families to claim tax deductions for expenses related to the medical treatment, rehabilitation, and insurance of differently-abled dependants with at least 40% disabilities.
Under Section 80DD:
Tax deduction on expenses for a disabled (at least 40%) dependant can be claimed up to ₹75,000.
Tax deduction on expenses for a severely disabled (at least 80%) dependant can be claimed up to ₹1,25,000.
Deductions under Section 80DD can be claimed at the time of filing your annual income tax returns.
Expenses related to the medical treatment, nursing, and rehabilitation of the dependant and insurance paid towards special insurance plans for differently-abled dependants can be claimed for deductions under Section 80DD.