Section 80DD Deductions – Eligibility & Documents Required

Income tax return

The rate of medical inflation has increased over the last few decades. Medical expenses are continually rising, making it difficult to fund them with your hard-earned money. When you have a person with special needs at home, managing finances and treatment costs can be even more difficult. Consequently, the Income Tax Act of 1961 allows certain deductions for payments related to the maintenance of a disabled individual.

Section 80DD eligibility

Any Hindu Undivided Family (HUF) caretaker can claim the section 80DD deduction under of the Income Tax Act.

For foreign nationals and NRIs, this deduction is not available, because the governments of these countries have several medical programs. 

Under section 80DD of the Income Tax Act, what expenses are deductible?

A deduction for the following expenses can reduce your overall tax liability: 

  • Payments for medical treatment, including nursing care, training, and rehabilitation.
  • Payments made to a health insurance program drafted by life insurance companies (subject to the policy’s terms and conditions).

Under section 80DD, which ailments are considered disabilities?

In section 80DD, disabilities are defined under clauses (a), (c) and (h) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995, as well as clauses (a), (c) and (h) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999. As part of its scope, it includes autism, cerebral palsy, and multiple disabilities.

The entire amount of deduction can be claimed by the individuals and HUF irrespective of the actual medical expenses. To claim a deduction under section 80DD, no specific documents need to be furnished, but a medical certificate authenticating the disability by a medical professional is required.

What is the maximum deduction available under section 80DD?

When the expenses are for an individual with 40% or more disability, Section 80DD allows a flat deduction of $75,000. For cases of severe disabilities, which are defined as those with 80% or more disability, the deduction increases to $1,25,000.

How do I claim the benefits of section 80DD? What documents must I produce?

Individuals and HUFs can claim the entire deduction regardless of the actual medical expenses. A medical certificate authenticating the disability by a medical professional is required to claim a deduction under section 80DD.

In addition to the deduction provided by section 80DD, you can also purchase health insurance plans that specifically cover medical expenses. These may include critical illness plans or even health insurance for seniors. As a result of these health insurance plans, treatment costs are also covered. Additionally, the premiums paid for these plans are deductible under section 80D. By purchasing a health insurance, you can get dual benefits.

It is important to understand what health insurance is and how it can benefit you by safeguarding your finances while providing the right treatment for the insured. The subject matter of the solicitation is insurance. Before concluding a sale, please read the sales brochure/policy wording carefully for details such as benefits, exclusions, limitations, and terms and conditions.

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