Different sub-sections of Section 80DD of the Income Tax Act's Chapter VI A empower an assessee to deduct certain tax-saving investments, allowed expenses, charitable contributions, etc., from their total gross income.
Introduction to Section 80DD of the IT Act, 2000
Residents who are either individuals or HUFs are eligible for a deduction under section 80DD of the Income Tax Act for a dependent who is differently abled and fully dependent on them for support and maintenance.
Families of dependents with disabilities are eligible for tax advantages under Section 80DD to care for them. Both individual caregivers and Hindu Undivided Families have the right to make this claim (HUF).
Families of disabled people are eligible for a deduction under Section 80DD for the cost of caring for a dependent disabled. Families of dependent disabled may claim deductions under Section 80DD, not the dependents themselves.
A disabled person cannot claim a deduction (80C and 80D Deduction limit) for the same amount under Section 80DD if they have already claimed it under Section 80U.
HUFs and people providing care for a dependent disabled may claim the benefits of Section 80DD. The expenses for taking care of a dependent who is disabled are eligible for deductions.
The deduction amount will also include insurance premiums paid to particular insurers to maintain a dependent who is disabled.
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What does “Dependents” Mean in the Context of Section 80DD?
When referring to Section 80DD dependents, it means:
- Spouse
- Kids
- Siblings
- Parents
- and HUF members
To qualify for the deduction, the individuals mentioned above must entirely or primarily rely on the taxpayer for their assistance and care.
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What Does “Disability” Mean in the Context of 80DD?
Autism, cerebral palsy, and multiple disabilities, as defined by the “National Trust for Welfare of Persons with Mental Retardation, Cerebral Palsy, Autism, and Multiple Disabilities Act, 1999”, are included in the definition of a disability under Section 80DD of the “Persons with Disabilities Act, 1995.”
As a result, a Person with a Disability denotes someone who, according to a reliable medical source, is suffering 40% of the time.
Eligibility Conditions for Claiming the Section 80DD Deduction
To qualify for this deduction, you must complete the requirements listed below:
- The taxpayer’s dependent, not the taxpayer himself, is eligible for a deduction
- Only Indian citizens who are residents may claim the deduction
- If the dependent has already claimed a deduction for themselves under section 80U, the taxpayer is not eligible for this deduction
- In the case of a single taxpayer, the term “dependent” refers to the taxpayer’s spouse, children, parents, siblings, and sisters, meaning a HUF member when referring to a HUF
- The taxpayer has spent money on the dependent’s maintenance, training, and rehabilitation (including nursing costs), or the taxpayer may have contributed to a LIC or other insurer’s maintenance plan
- At least 40% of the dependents are disabled
- Section 2(i) from the Persons with Disabilities Act, 1995 defines disability.
Under Section 80DD, an undivided Hindu family and an individual resident taxpayer qualify for a tax deduction. Such a deduction may be made for a dependent.
An individual taxpayer’s spouse, children, parents, siblings, and sisters, or any of them, are their dependents. When a HUF is involved, the dependant belongs to the HUF.
What is the Deduction Allowed by Section 80DD?
This section offers a fixed deduction; it is independent of both age and expense amount. If –
- The maximum deduction from gross income for normal disability (defined as at least 40%) is ₹75,000
- The maximum deduction from total gross income (GTI) for severe disability (i.e., 80% or more) is ₹1, 25,000.
Even if the actual costs for those, as mentioned earlier, impaired dependent are less than the specified sum, a full deduction may be claimed under Section 80DD.
How Can One Make a Section 80DD Deduction Claim?
A photocopy of the certificate issued by the medical expert in the necessary form, Form 10-IA, and in an authorised manner, along with the ITR, must be submitted by the individual requesting the deduction. Keeping the paperwork on hand is advisable because hardly any document is necessary to be connected with an ITR.
Which Medical Certificate is Necessary to Comply with Section 80DD?
It is necessary to have a medical certificate from a licensed doctor to claim a deduction under Section 80DD. These people are thought to be reliable for such a certificate.
- A doctorate of medicine (MD) in neurology or a neurosurgeon
- A pediatric neuropathologist holds a medical degree comparable to that of a neuropathologist
- A Chief Medical Officer (CMO) from just about any government institution or a Civil Surgeon.
As a result, it only suggests that if you are deducting under this provision, you should keep the certificate you can obtain from an authorised medical practitioner. Additionally, it is advised that the clinical prescription and records be stored safely in case the income tax division requests them to classify based on Classes Of Income Tax.
Additional Information Regarding Claiming Deduction
People must also provide a self-declaration that is signed and attests to the costs expended for the disabled dependent’s medical care, including nursing, rehabilitation, and training.
The actual receipts for the expenses incurred by the disabled dependents need not be kept on file. However, actual receipts must be shown if a deduction is requested in relation to payments made to any insurer, including LIC, UTI, and others, in order to obtain insurance plans or programs for the support of a dependent who is disabled.
When requesting the deduction from any Public Hospital related to the aforementioned disability, a medical certificate is required. Both the dependent and the person they are dependent on should have their disabilities attested in the document. Periodically, the certificate must be renewed.
Autism, cerebral palsy, or any other combination of disabilities would necessitate the completion and submission of form 10-IA on their behalf. For a person with any type of serious mental illness plus the other disabilities, there are two additional formats in addition to the one already described.
Conclusion
Numerous Indian families would undoubtedly profit considerably from Section 80DD regarding their medical bills. The new changes ensure that the maximum limit of the amount allowed for a deduction has significantly increased as the medical profession has expanded and difficulties have increased. The Income Tax Act’s: https://incometaxindia.gov.in/pages/acts/income-tax-act.aspx other provisions that offer comparable benefits to taxpayers but with different details must be explicitly separated from Section 80DD.
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