Section 80DD: Who is eligible to claim a deduction?

A resident who is either an individual or a HUF is eligible to claim a deduction under section 80DD of the Income Tax Act if their dependent is differently abled and fully dependent on them.

The tax benefits of Section 80DD are available to families caring for dependents with disabilities. Neither individual caregivers nor Hindu Undivided Families (HUF) are eligible to file this claim.

A deduction for costs associated with caring for disabled dependents is available under Section 80DD. Under Section 80DD, only the families of disabled dependents are entitled to claim deductions.

If a disabled person has already claimed a deduction under Section 80U, they cannot claim it again under Section 80DD.

HUFs and people taking care of disabled dependents can deduct expenses related to their care under Section 80DD.

A disabled dependent’s insurance premiums will also be deducted from the deduction amount.

How does Section 80DD define “Dependents”? 

In the case of Section 80DD dependents, it means:

• Husband/wife
• Children
• Having siblings 
• Families
• The HUF and its members

In order to qualify for the deduction, the individuals mentioned above must depend entirely or primarily on the taxpayer for their care and assistance. 

In the context of 80DD, what does “Disability” mean? 

The “Persons with Disabilities Act, 1995” includes autism, cerebral palsy, autism, and multiple disabilities, as defined by the National Trust for Welfare of Persons with Mental Retardation, Cerebral Palsy, Autism, and Multiple Disabilities Act.

Thus, a Person with a Disability is someone who, according to a reliable medical source, suffers 40% of the time.

Section 80DD Deduction Eligibility Conditions 

In order to qualify for this deduction, you must meet the following requirements:

• A deduction is available for a taxpayer’s dependent, not for the taxpayer himself
• The deduction is only available to Indian citizens who are residents
• The taxpayer is not eligible for this deduction if the dependent has already claimed a deduction under section 80U
• In the case of a single taxpayer, “dependent” refers to the taxpayer’s spouse, children, parents, siblings, and sisters, as well as a member of a HUF
• A taxpayer has spent money on the dependent’s maintenance, training, and rehabilitation (including nursing costs), or contributed to a LIC or other insurer’s maintenance plan.
• A minimum of 40% of the dependents are disabled
• Persons with Disabilities Act, 1995, section 2(i) defines disability.

Individuals and undivided Hindu families may deduct taxes under Section 80DD. Deductions may be made for dependents.

Dependents of an individual taxpayer include their spouse, children, parents, siblings, and sisters. A HUF’s dependant belongs to the HUF.

What is the Deduction Allowed by Section 80DD? 

The deduction in this section is independent of both age and expense amount.

• The maximum deduction for normal disability (defined as at least 40%) is $75,000.
• A severe disability (i.e., 80% or more) can be deducted up to $1,250,000 from total gross income (GTI).

It is possible to claim a full deduction under Section 80DD even if actual expenses are less than the specified sum for impaired dependents. 

What is the process for claiming a Section 80DD deduction?

A photocopy of the medical expert’s certificate in Form 10-IA and in an authorised manner, together with the ITR, must be submitted by the individual requesting the deduction. Since hardly any documents are required to accompany an ITR, it is advisable to keep them handy. 

Which Medical Certificate is Necessary to Comply with Section 80DD?

In order to claim a deduction under Section 80DD, a licensed doctor must provide a medical certificate. These professionals are regarded as reliable.

• In neurology or neurosurgery, a doctorate of medicine (MD) is required
• Pediatric neuropathologists hold medical degrees similar to those of neuropathologists
• It could be a Chief Medical Officer (CMO) from any government institution or a Civil Surgeon.

Thus, it only suggests that if you are deducting under this provision, you should keep the certificate you can obtain from an authorised medical practitioner. In addition, the clinical prescription and records should be stored securely in case the income tax division requests them.

Claiming Deductions: Additional Information

A self-declaration must also be provided, which attests to the costs incurred for the disabled dependent’s medical care, including nursing, rehabilitation, and training.

There is no need to keep receipts for the expenses incurred by disabled dependents. Deductions for payments made to insurers, including LIC, UTI, and others, to obtain insurance plans or programs for disabled dependents must, however, be accompanied by actual receipts.

Medical certificates are required when requesting deductions from public hospitals for the aforementioned disability. In the document, both the dependent and the person they are dependent on should attest to their disabilities. Renewal of the certificate is required periodically.

Autism, cerebral palsy, or any other combination of disabilities would require the completion and submission of form 10-IA. A person with serious mental illness plus the other disabilities has two additional formats in addition to the one described above.

Conclusion:-

There is no doubt that Section 80DD would benefit many Indian families significantly when it comes to their medical bills. As the medical profession has expanded and difficulties have increased, the maximum deduction limit has been increased significantly. Other provisions of the Income Tax Act that provide comparable benefits to taxpayers but with different details must be explicitly separated from Section 80DD.