What is Section 80DD?

In the last few years, the cost of medical treatment has been on the rise and is only set to go higher. With the intent to give some relief to working-class individuals shelling out large sums of money on healthcare, especially differently-abled and disabled individuals, the Government of India has provided tax benefits under Section 80DD of the Income Tax Act.

Indian citizens, under Section 80DD of the Income Tax Act, 1961, are eligible to claim tax deductions. Deductions can be claimed by Indian citizens and ‘Hindu Undivided Families’ for the clinical treatment of a dependent family member who is disabled or differently-abled. This deduction amount also extends to the insurance premium that is paid towards a specific insurance plan for a dependent that is disabled or differently-abled.

Let us go through the details to know more about deductions under section 80DD.

Deduction under Section 80DD - Terms & Condition

As is with other sections of the Income Tax Act, there are specific terms and conditions for tax deduction under Section 80DD too. If these conditions are found to be non-applicable, tax benefits could be withdrawn from the taxpayer.

  • The taxpayer cannot claim the deduction for expenses incurred on himself/herself. The expenses should have been incurred on behalf of their dependent, disabled family member.

  • The dependents can be the spouse, brother, sister, parents, or children of the taxpayer.

  • If the dependent has already claimed a deduction for themselves under section 80U, the taxpayer is ineligible to claim deductions on behalf of the dependant.

  • To avail of this deduction, it is important that the taxpayer has borne the expenses of the dependent for medical care, treatment, training, and rehabilitation, or the taxpayer has paid premiums against medical insurance for the dependent.

  • It is pertinent that the disability is as described under Section 2(i) of 1995, Disability Act and at least at 40%

Eligibility for Claiming Deductions under 80DD

To claim deductions under section 80DD, one must meet the following criteria:

  • An individual Indian resident or a member of an HUF

  • Individuals not residing in India (NRIs) cannot claim for these deductions

Disabilities covered under section 80DD

Disorders, as defined under Section 2(i) of 1995, Disability Act, and Section 2, clause (a), (c), (h) of Multiple Disabilities Act, 1999 are covered under Section 80DD.

The following disabilities are defined for tax deduction under section 80DD:

  • Mental retardation/intellectual disability

  • Impairment of hearing

  • Mental illness

  • Locomotor disability

  • Low vision

  • Blindness

  • Cerebral palsy

  • Autism

  • Leprosy-cured

Documents Required to claim 80DD deduction

To claim deductions under section 80DD, you must produce the following documents:

  • Medical certificate: A copy of the medical certificate that authenticates the disability of the dependent must be submitted for 80DD deductions.

  • Certificate of self-declaration: A self-declaration certificate must be procured by taxpayers to mention the expenses incurred on dependent’s medical treatment.

  • Form 10-IA: This form must be submitted in case the taxpayer’s dependent is suffering from cerebral palsy, autism, or multiple disabilities.

  • Insurance premium receipts: Usually, self-declaration certificate suffices for laying claim to most deductions. However, in case a claim against insurance policy premiums is to be made, it is important to submit receipts of the insurance premium paid.

Claiming 80DD Tax Deductions

  • To claim your 80DD deduction, you would first and foremost need to procure a medical certificate from the CMO (Chief Medical Officer) or a civil surgeon practicing at a government medical hospital or a neurologist holding an MD (Doctor of Medicine).

  • Next, it’s important to understand the scope of deductions you would be eligible to avail of:

    • For a dependent person with 40% disability, the taxpayer who takes care of the dependent can claim income tax deductions up to ₹75,000

    • For a dependent person with a severe 80% disability, the taxpayer who takes care of the dependent can claim income tax deductions up to ₹1,25,000

  • You can now fill in the requisite ITR, along with documents like insurance receipts, self-declaration certificates to supplement your returns.

Conclusion

Thus, by adhering to the eligibility criteria, producing the necessary documentation and filing one’s returns on time, you can avail of tax benefits under Section 80DD of the ITA.

FAQs

  • ✔️Can NRIs claim deductions under section 80DD?

    No, NRIs cannot claim deductions under section 80DD. Tax benefits can be claimed only by Indian residents.
  • ✔️How is section 80DD different from section 80U?

    Under section 80U, the disabled person can themselves claim the tax benefits in question; whereas, under section 80DD, deductions can be claimed by the taxpayer on whom the disabled person is dependent.
  • ✔️Can I claim deductions under Section 80D in addition to Section 80DD?

    You can claim deductions under Section 80D, over and above the deductions available under Section 80DD. The deductions available under Section 80D can be claimed for premiums incurred on a medical insurance policy for yourself, your spouse, your children and parents. Deductions of up to Rs. 25,000 can be claimed under Section 80D. Additional deductions of up to Rs. 25,000 are available for insurance premium expenses incurred for one’s parents. In order to claim such deductions, you can purchase the Bajaj Allianz Health Insurance policy on Finserv MARKETS. In addition to tax benefits, you can also benefit from free medical health check-ups, high sum assured of up to Rs. 50 lakhs, coverage for pre and post hospitalization expenses and much, much more.

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